Jakarta. Indonesia’s stock market staged a strong rebound in July, with the benchmark Jakarta Composite Index (JCI) surging 8.04 percent month-on-month to close at 7,484.34, reversing its previous downtrend and signaling renewed investor optimism amid improving global conditions and a wave of corporate share buybacks.

The rise pushed the index to a year-to-date gain of 5.71 percent, recovering from a 2.15 percent loss recorded through June. According to Inarno Djajadi, Chief Executive for Capital Markets Supervision at the Financial Services Authority (OJK), the rally was fueled by easing global trade tensions and an improving economic outlook.

“This July, all sectoral indices posted gains, reflecting a broad-based recovery,” Inarno said during a virtual monthly board meeting on Monday. He added that the market capitalization of the Indonesia Stock Exchange (IDX) reached an all-time high of Rp 13,700 trillion ($835.88 billion) on July 29, with record values sustained over three consecutive days.

Despite the rally, foreign investors remained net sellers, recording Rp 8.34 trillion in net sales in July and Rp 61.91 trillion year-to-date.

Fundraising in the capital market also remained robust, with Rp 144.78 trillion raised through public offerings so far this year, including Rp 8.49 trillion from 16 new listings. Meanwhile, the bond market strengthened as the Indonesia Composite Bond Index rose 0.96 percent month-on-month and 6.67 percent year-to-date.

In the investment management sector, total Assets Under Management (AUM) reached Rp 856.62 trillion, up 1.95 percent from June. Mutual funds booked net inflows of Rp 14.43 trillion during the month.

One standout trend was the surge in share buyback activity. As many as 45 listed companies announced buybacks without shareholder approval between March 20 and July 31, under a regulatory exemption allowing such actions during market volatility. Of those, 36 companies executed buybacks totaling Rp 3.7 trillion, about 13.8 percent of the Rp 26.52 trillion allocated.

“This regulatory relaxation aims to stabilize the market during turbulent times and support investor confidence,” Inarno said, citing OJK Regulation No. 13/2023 that enabled the move. “The buybacks signal confidence from issuers in their long-term prospects.”

July also marked a surge in daily trading activity, with average daily turnover rising to Rp 13.42 trillion, up from Rp 13.29 trillion in June and well above the 2024 average of Rp 12.85 trillion.

Analysts expect the JCI’s rally to continue toward the 7,800 level, driven by improving sentiment, easing monetary policy expectations from Bank Indonesia, and global dovish signals from the Federal Reserve. 

“The breakout above 7,600 signals a strong bullish trend,” said Mayang Anggita of Panin Sekuritas. “While short-term corrections are likely, the market remains in an upward trajectory.”

Top-performing sectors included finance, infrastructure, basic materials, energy, and non-cyclical consumer goods. Market watchers recommend selective buying, particularly in stocks with exposure to renewable energy, EV supply chains, and defensive consumer demand.

With strong macroeconomic fundamentals, potential rate cuts, and renewed corporate activity, analysts at Mirae Asset Sekuritas believe the JCI could reach as high as 7,882 in the third quarter.