Amid Market Volatility, Mirae Asset Sekuritas Highlights Fundamentals and Capital Market Reform

PT Mirae Asset Sekuritas Indonesia emphasized the importance of a selective investment strategy amid global market volatility and uncertainty surrounding the proposed MSCI reclassification of Indonesia. These issues were highlighted at its October 2026 Media Day, themed “Navigating Uncertainty: A New Perspective on Indonesia’s Market,” which examined market dynamics and investment opportunities amid ongoing uncertainty.

Rully Arya Wisnubroto, Head of Research & Chief Economist at Mirae Asset Sekuritas Indonesia, said Indonesia’s financial markets continue to face pressure from a combination of global uncertainty and domestic challenges. Globally, elevated US Treasury yields, expectations of persistently high interest rates, and rising energy prices could intensify pressure on emerging market currencies and increase capital flow volatility.

These pressures were also reflected in the rupiah, which traded at around IDR 18,000 per US dollar in mid-October 2026. Domestically, Bank Indonesia had raised its policy rate by a cumulative 100 basis points since May 2026 to 5.75% to maintain rupiah stability. Meanwhile, inflation stood at 3.28% in September 2026, although Mirae Asset expects it could reach 4.0% by year-end, driven primarily by rupiah depreciation and rising food prices.

“Investors need to assess market conditions holistically, as global pressures affect not only stock prices but also exchange rates, bond yields, and capital flows. Under these conditions, Indonesia’s economic fundamentals remain relatively resilient, but pressure on purchasing power and inflation risks still warrant close attention,” Rully said.

Beyond macroeconomic factors, market attention has also focused on MSCI’s proposal to potentially reclassify Indonesia as a Standalone Market. Rully emphasized that the proposal is not yet a final decision. Consultations are ongoing, while capital market authorities are implementing a series of reforms to improve share ownership transparency, strengthen disclosure, and enhance overall market quality.

According to Rully, the direction of these reforms will be an important factor in shaping investor confidence. Consistent implementation and verifiable results will be key market considerations, particularly amid concerns about potential changes in foreign fund flows if MSCI's policy changes.

These pressures have contributed to heightened stock market volatility. On October 16, 2026, the Jakarta Composite Index (JCI) fell 11.6% in a single trading session following the MSCI-related announcement. Foreign investors have also continued to record significant net selling year to date. These developments demonstrate that market movements are influenced not only by valuations and corporate performance but also by investor sentiment and progress in capital market reform.

“While the correction in stock valuations may create opportunities, lower prices do not automatically mean the market will recover soon. Investors still need to monitor foreign fund flows, progress in market reforms, and companies’ ability to sustain their underlying fundamentals,” Rully added.

Uncertainty surrounding MSCI has also affected consumer sector stocks. Putu Chantika Putri Dhammayanti, Research Analyst at PT Mirae Asset Sekuritas Indonesia, said investors should take a more selective approach to the sector, as market pressures do not affect every issuer equally. In addition to purchasing power and operating costs, foreign ownership and each company's business resilience also influence stock performance.

On October 16, 2026, when the JCI declined 11.6%, the consumer non-cyclicals sector fell 10.1%. Several consumer stocks also experienced significant declines, including MIDI, which dropped 12.4%, and AMRT, which fell 14.9% that day. According to Chantika, these movements should be viewed in the context of uncertainty surrounding the MSCI proposal and potential shifts in foreign fund flows, rather than being interpreted solely as a reflection of changes in companies’ business fundamentals.

“In the current market environment, investors need to distinguish between pressure driven by sentiment and fund flows and changes in corporate fundamentals. Market weakness can create opportunities, but not all stocks will recover at the same pace. Stock selection should therefore be based on each issuer’s business resilience and earnings outlook,” Chantika explained.

Differences in year-to-date stock performance further underscore the importance of this approach. As of October 16, 2026, MAPI had gained 13.3% year to date, while AMRT and UNVR had declined by approximately 46.6% and 46.5%, respectively. These divergent performances illustrate that consumer stocks have different characteristics and varying levels of resilience in the face of market pressures.

Chantika also cautioned that valuations below historical averages do not automatically guarantee a stock price recovery. Changes in consumption patterns, cost pressures, companies’ ability to maintain margins, and earnings growth prospects should remain key considerations. In this environment, sales volume resilience is an important indicator of a company's ability to sustain performance amid an uneven recovery in consumption.

“Low valuations alone are not sufficient grounds for investment decisions. Investors need to assess whether companies can maintain sales volumes, preserve profitability, and demonstrate clear growth catalysts. We continue to see opportunities in issuers with resilient sales volumes, but the approach needs to be more selective rather than relying solely on the assumption that valuations will revert to historical averages,” Chantika added.

In its research, Mirae Asset continues to monitor MIDI, MAPI, and CMRY, taking into account each company's sales volume resilience and business outlook. This approach underscores the importance of fundamental-based stock selection amid foreign fund outflows and shifting market sentiment, rather than assuming that all consumer stocks will recover equally.

In addition to discussing market conditions and investment opportunities, the Media Day also introduced the Securities Pledge Loan (Gadai Efek) referral service through a collaboration between Mirae Asset Sekuritas Indonesia and PT Pegadaian, offering an alternative source of liquidity backed by investment portfolios.

Simon Gunawan Sinaga, Head of Business Development at PT Mirae Asset Sekuritas Indonesia, explained that the facility allows clients to apply for loans secured by eligible securities, such as selected stocks or government bonds, without having to sell their investment assets immediately.

“Through the Securities Pledge Loan referral service, we aim to support clients’ access to liquidity solutions while prioritizing risk education and clarity regarding each party’s role,” Simon said.

Under this arrangement, Mirae Asset acts as a referral partner, assisting with preliminary document checks and verifying the availability of eligible securities. Pegadaian retains full authority over the verification process, collateral valuation, and lending decisions.

The pledged securities remain registered in the client's name but are blocked while serving as collateral. Clients should also understand the risks associated with a decline in collateral value, which may trigger requirements to provide additional collateral or make partial repayments, as well as the possibility of collateral liquidation if their obligations are not met.

Through this Media Day, Mirae Asset reaffirmed the importance of making selective and measured investment decisions that account for market dynamics, underlying investment fundamentals, and associated risks, including when considering portfolio-backed liquidity solutions.