Maybank Securities Cuts 2026 IHSG Target to 6,900

Maybank Securities Indonesia has cut its year-end 2026 target for the Jakarta Composite Index (IHSG) to 6,900, down from 7,500 previously. The call came in research published Wednesday, October 14, 2026, the same day the IHSG closed at 5,943.02, down 32.07% year-to-date.

The new target implies a valuation of roughly 10.9 times 2026 earnings estimates. Maybank Securities Indonesia analyst Jeffrosenberg Chenlim said earnings recovery among listed companies has been slower than expected, not strong enough yet to sustain a broader market rally.

Earnings forecast trimmed, growth still uneven

Maybank lowered its aggregate core profit growth forecast for companies in its research coverage to 8.3% year-on-year, down from 9.4% previously. Jeffrosenberg noted that profit growth is still continuing, but the recovery process has proven weaker than anticipated.

"We remain concerned that earnings growth will take time to translate into stronger stock performance," Jeffrosenberg wrote in the research note, as cited by Kontan.

He pointed to Indonesia's economic growth remaining uneven and concentrated in a limited number of sectors. Meanwhile, elevated energy prices risk squeezing household purchasing power, eroding corporate margins, and adding to the government's subsidy burden. Rising interest rates also threaten to tighten financial system liquidity, a risk that could worsen if it triggers rupiah weakness.

According to Jeffrosenberg, rupiah stability and fiscal credibility are key to sustaining any market recovery. Policy uncertainty, he added, could further weigh on investor confidence in the domestic stock market.

Foreign selling and rights issues squeeze liquidity

Pressure on the IHSG is also coming from capital flows. Maybank recorded foreign net selling rising to $496 million in September 2026, up from $201 million in August 2026. That brings year-to-date foreign outflows to roughly $6.1 billion.

Average daily trading value also fell 6% month-on-month to around $800 million. The financial sector has been the biggest contributor to foreign selling, accounting for about 60% of total outflows so far this year.

Ownership composition has shifted accordingly. Foreign ownership of Indonesian stocks has dropped to 35.8%, while domestic retail ownership has climbed to 51.7%. Maybank warned that the market's growing reliance on retail investors makes the IHSG more vulnerable should domestic buying momentum fade.

On top of foreign flows, the market also needs to absorb a wave of rights issues. A rights issue is a mechanism companies use to raise fresh capital by offering new shares first to existing shareholders through pre-emptive rights. Investors who want to keep their ownership stake intact have to put up additional cash to exercise those rights, effectively pulling liquidity away from the secondary market.

Maybank estimates rights issue activity over the next four months at around Rp18 trillion, comprising KOTA at Rp5 trillion, ENRG at Rp4.2 trillion, VKTR at Rp3 trillion, MGLV at Rp2.5 trillion, BUVA at Rp1.5 trillion, CBRE at Rp1.3 trillion, BRNA at Rp370 billion, and AHAP at Rp175 billion.

That figure doesn't yet account for DOOH's planned issuance of roughly 155 billion new shares. If that corporate action is included, total share issuance could balloon to between Rp30 trillion and Rp40 trillion, depending on the exercise price and timing. Jeffrosenberg noted that the need to fund rights issue participation could push investors to sell other holdings or delay secondary market purchases, prolonging broader liquidity pressure.

External headwinds: Treasury yields, oil, and Europe

Globally, rising US government bond yields are intensifying competition for capital flows. The 10-year US Treasury yield stood at around 5.25%, making dollar-denominated fixed income more attractive relative to riskier assets like emerging market equities.

For Indonesia, weak foreign inflows and rupiah pressure could keep domestic bond yields and Bank Indonesia Rupiah Securities (SRBI) rates elevated. That dynamic could limit room for monetary easing and weigh on equity valuations.

Escalating tensions in the Middle East have also pushed Brent crude above $105 per barrel. High energy prices add to import and subsidy burdens while squeezing corporate margins and household spending power. In Europe, the European Central Bank forecasts eurozone growth of just 0.9% in 2026, another headwind for Indonesia's export demand.

November MSCI review another factor to watch

Beyond earnings and capital flows, investors are also watching the MSCI index review scheduled for November 2026. MSCI currently maintains restrictions on adding new stocks to the index and upgrading existing stock classifications.

MSCI is a benchmark index provider used by many global passive funds and ETFs to determine country allocations. If Indonesia's weight in MSCI indices rises, passive money tends to flow in automatically to match the change. The restrictions currently in place mean that potential inflows from passive investors stay limited, at least until the classification changes at a future review.

In its base case scenario, Maybank expects Indonesia to retain its emerging market status, with current restrictions likely to persist following the review.

What it means for investors

Maybank's revised 6,900 target suggests limited upside from the current 5,943.02 level compared with the more bullish 7,500 target set earlier in the year. With retail investors now holding 51.7% of market ownership, the index has also become more exposed to short-term sentiment swings than it was when foreign funds dominated flows. Several concrete things worth tracking include:

• Monthly foreign net selling figures, particularly in the financial sector, which has driven the bulk of this year's outflows.
• The execution timeline for rights issues from KOTA, ENRG, VKTR, MGLV, BUVA, CBRE, BRNA, and AHAP over the next four months, plus clarity on DOOH's share issuance that could push the total toward Rp40 trillion.
• Movements in the 10-year US Treasury yield near 5.25% and Brent crude above $105 per barrel as gauges of external pressure.
• The outcome of MSCI's November 2026 review regarding Indonesia's market status and index inclusion restrictions.
• Upcoming corporate earnings data to see whether Maybank's revised 8.3% YoY profit growth forecast holds or gets cut further.

With retail investors now holding 51.7% of market ownership, the IHSG's trajectory increasingly hinges on domestic buying appetite. Should that momentum weaken amid rights issue demands and continued foreign outflows, index volatility could stay elevated through year-end.