Strategy
Strategy: Aug 26 Alpha Picks: Strong July Rally; Key Events In Focus
Highlights
- Our Alpha Picks’ July returns booked +22.6%, driven by a mix of high and low beta stocks.
- We take out DEWA and add AMMN and ARCI to our August portfolio.
- Our top picks: ASII, BBCA, BMRI, BULL, CMRY, AMMN, ARCI, ELSA, INKP, and EXCL.
Analysis
- Broad-based recovery in July. The JCI staged a broad recovery in July, gaining 10.5% mom, with blue-chip proxies LQ45 and IDX30 also posting strong recoveries of +12.3% and +11.3%, respectively. Historically, July has closed positive at 2.9% in the past 10 years, while August has historically posted a positive close of 2.1% over the same period. Despite the index's gains, foreign investors remained net sellers, with outflows of Rp8.15t (US$452m) over the month (regular market). Leading movers were BBCA, BBRI, AMMN, BRPT, and BMRI, while the key laggards were MORA, SMMA, TCPI, FILM, and MSIN.
- Our Alpha Picks returned 22.6% mom in July, outperforming the JCI by 12.1%. Our July portfolio blended blue-chips with retail-driven names, mixing low- and high-beta exposures. Performance was led by DEWA (+62%), BULL (+47.4%), ELSA (+33.7%), INKP (+18.7%), BBCA (+13.96%), and ASII (+12.8%), while lower-beta defensives such as CMRY (+3.4%) and EXCL (+2.95%) lagged the portfolio, as expected given their lower sensitivity to the broader rally.
- Seasonality aside, a confluence of catalysts underpinned July's rally. Beyond the JCI's usual harvest-season seasonality, several catalysts reinforced the positive sentiment: A wave of IPOs in July lifted retail investor participation; S&P's 13 July affirmation of Indonesia's BBB rating with a stable outlook, notably the only major agency to hold a stable view after Fitch and Moody's had already cut Indonesia to negative earlier in the year, reassured investors on fiscal credibility; and progress on the Kopdes (Village Cooperative Program) and free-meal programme amid tight banking and fiscal liquidity helped stabilise the rupiah against the DXY. Sentiment was further supported by solid 1H26 corporate results, with our aggregate coverage posting revenue/net profit growth of +7.5%/+13.2% yoy, respectively in 1H26, excluding UNTR’s.
- Key headwinds in August. MSCI's 12 August review poses downside risk, no additions expected (freeze until November), but GOTO and CPIN are candidates for deletion, risking passive outflows. BI's governor succession remains a swing factor for sentiment, following Warjiyo's surprise resignation. 2Q26 GDP (5 August) will also be closely watched as a read on growth momentum amid recent policy and fiscal noise.
Action
- Portfolio positioning for August. We stay constructively balanced between high- and low-beta names, weighing August's typical strong seasonality against the headwinds flagged above. We remove DEWA following its sharp rally, and add AMMN on expectations of a strong 2Q26 (results currently being audited).
- Our top picks: ASII, BBCA, BMRI, BULL, CMRY, AMMN, ARCI, ELSA, INKP, and EXCL.
Highlights
- Our Alpha Picks’ July returns booked +22.6%, driven by a mix of high and low beta stocks.
- We take out DEWA and add AMMN and ARCI to our August portfolio.
- Our top picks: ASII, BBCA, BMRI, BULL, CMRY, AMMN, ARCI, ELSA, INKP, and EXCL.
Analysis
- Broad-based recovery in July. The JCI staged a broad recovery in July, gaining 10.5% mom, with blue-chip proxies LQ45 and IDX30 also posting strong recoveries of +12.3% and +11.3%, respectively. Historically, July has closed positive at 2.9% in the past 10 years, while August has historically posted a positive close of 2.1% over the same period. Despite the index's gains, foreign investors remained net sellers, with outflows of Rp8.15t (US$452m) over the month (regular market). Leading movers were BBCA, BBRI, AMMN, BRPT, and BMRI, while the key laggards were MORA, SMMA, TCPI, FILM, and MSIN.
- Our Alpha Picks returned 22.6% mom in July, outperforming the JCI by 12.1%. Our July portfolio blended blue-chips with retail-driven names, mixing low- and high-beta exposures. Performance was led by DEWA (+62%), BULL (+47.4%), ELSA (+33.7%), INKP (+18.7%), BBCA (+13.96%), and ASII (+12.8%), while lower-beta defensives such as CMRY (+3.4%) and EXCL (+2.95%) lagged the portfolio, as expected given their lower sensitivity to the broader rally.
- Seasonality aside, a confluence of catalysts underpinned July's rally. Beyond the JCI's usual harvest-season seasonality, several catalysts reinforced the positive sentiment: A wave of IPOs in July lifted retail investor participation; S&P's 13 July affirmation of Indonesia's BBB rating with a stable outlook, notably the only major agency to hold a stable view after Fitch and Moody's had already cut Indonesia to negative earlier in the year, reassured investors on fiscal credibility; and progress on the Kopdes (Village Cooperative Program) and free-meal programme amid tight banking and fiscal liquidity helped stabilise the rupiah against the DXY. Sentiment was further supported by solid 1H26 corporate results, with our aggregate coverage posting revenue/net profit growth of +7.5%/+13.2% yoy, respectively in 1H26, excluding UNTR’s.
- Key headwinds in August. MSCI's 12 August review poses downside risk, no additions expected (freeze until November), but GOTO and CPIN are candidates for deletion, risking passive outflows. BI's governor succession remains a swing factor for sentiment, following Warjiyo's surprise resignation. 2Q26 GDP (5 August) will also be closely watched as a read on growth momentum amid recent policy and fiscal noise.
Action
- Portfolio positioning for August. We stay constructively balanced between high- and low-beta names, weighing August's typical strong seasonality against the headwinds flagged above. We remove DEWA following its sharp rally, and add AMMN on expectations of a strong 2Q26 (results currently being audited).
- Our top picks: ASII, BBCA, BMRI, BULL, CMRY, AMMN, ARCI, ELSA, INKP, and EXCL.
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