The IDX Composite (Indeks Harga Saham Gabungan or IHSG) is a benchmark index for Indonesian equities, tracking the performance of all stocks listed on the Indonesia Stock Exchange (IDX). It is a market-capitalisation-weighted index.
As Indonesia’s flagship equity index, the IDX Composite serves as a measure of the country's economic health and the performance of its leading companies. It provides insights into key sectors driving Indonesia's growth.
IDX Composite, Chart & Dividend Yield
Previously, the Indonesia Stock Exchange was named the Jakarta Stock Exchange (JSX). However, it merged with the Surabaya Stock Exchange (SSX) in 2007. As a result, the Jakarta Stock Exchange Composite index was renamed the Indonesia Stock Exchange Composite index. The index tracks hundreds of companies, spanning sectors critical to Indonesia's economy, including financials, consumer goods, energy, telecommunications, and infrastructure.
Throughout 2022 and 2023, the IDX Composite mostly fluctuated due to global economic uncertainty. The volatility was driven by changes in commodity prices, foreign capital inflows, and Indonesia's domestic monetary policies.
IDX Composite All Shares Index Price Forecast
Bull Argument: The IDX Composite benefits from Indonesia's growing middle class, a robust banking sector, and the country’s vast natural resources. Strong demand for commodities, combined with the government’s focus on infrastructure development, supports long-term growth potential.
Many analysts are optimistic about the Indonesian market, citing stability in key sectors and a favourable demographic profile. Indonesian stocks rallied earlier this year following the election, which saw Defense Minister Prabowo Subianto win. He assumed office in October.
Bear Argument: On the flip side, the IDX Composite faces risks from global economic slowdowns, particularly in China—Indonesia’s largest trading partner. Additionally, the index’s heavy exposure to commodity-driven sectors like palm oil, coal, and oil & gas leaves it vulnerable to price volatility.
Investors may also need to consider the potential impacts of rising inflation and currency depreciation on corporate earnings. In July, it was reported that brokerages were slashing their targets for the IDX amid a deteriorating outlook. In addition, PT Barito Renewables Energy, labelled the “world's most volatile stock,” has impacted Indonesia's stock market.
Who Should Buy the IDX Composite?
Investing in the IDX Composite provides exposure to Indonesia's stock market, incorporating a range of sectors. Investors should assess whether the characteristics of this index align with their investment goals:
Seeking Exposure to Emerging Markets: The IDX Composite offers access to a fast-growing Southeast Asian economy. With sectors like banking, telecommunications, and consumer goods leading the way, investors seeking to capitalise on emerging market growth may find this index appealing.
Optimistic about Indonesia’s Resource-Rich Economy: Investors with a positive outlook on commodities, especially those related to energy and agriculture, may find opportunities in the IDX Composite. Companies like Astra International and Indofood Sukses Makmur are positioned to benefit from this trend.
Banking Sector Stability: Indonesia’s financial sector, led by firms like Bank Central Asia and Bank Rakyat Indonesia, has shown resilience. These banks are often seen as solid dividend payers, making them attractive to investors seeking both growth and income.
Belief in Indonesia’s Economic Fundamentals: The IDX Composite stands to gain from Indonesia’s structural reforms, young population, and increasing consumption. Those who are confident in the country’s long-term economic prospects, especially under its incoming new president, may view this index as a key investment avenue.
Seeking Dividend Income: Several of Indonesia’s largest companies in the IDX Composite, particularly in banking and consumer goods, offer regular dividends. Investors seeking income may find attractive yields in these sectors.
IDX Composite Top 10 Companies
The IDX Composite is reviewed periodically to ensure it accurately reflects the market. Major companies in the index include:
| Company | Market Cap (end 2024) |
|---|---|
| Bank Central Asia | $86.48 Billion |
| Bank Rakyat Indonesia | $52.76 Billion |
| Telkom Indonesia | $20.38 Billion |
| Unilever Indonesia | $5.39 Billion |
| Astra International | $13.77 Billion |
| Bank Mandiri | $44.36 Billion |
| Chandra Asri Petrochemical | $45.34 Billion |
| Indofood CBP | $9.11 Billion |
| Bayan Resources | $35.91 Billion |
| Alfamart | $8.43 Billion |
