The JCI endured a bruising week, sliding nearly 8% to 7,577 as markets were hit by a convergence of domestic and global shocks. MSCI warnings, a Fitch downgrade, and a weakening Rupiah unsettled sentiment, while February inflation surprised sharply to the upside at 4.76%, well above Bank Indonesia’s target. Pressure intensified further as Brent crude surged to $93 per barrel, marking the largest weekly gain since 1983, after escalating US–Iran tensions effectively disrupted traffic through the critical Strait of Hormuz.
   

For Indonesia as a net oil importer, the spike in energy prices raises concerns over the fiscal balance and adds another layer of macro uncertainty. Yet amid this storm, Our Analyst believes the market reaction has become excessively pessimistic. The JCI is now down 15% from its peak, pushing valuations across several sectors to levels typically associated with crisis periods rather than the current fundamental backdrop.

The most striking example is in the banking sector. Indonesia’s big three banks BBCA, BBRI, and BMRI have seen their P/B multiples compress by 35% to 45% from historical norms despite no deterioration in operating performance. BBRI, currently trading at 1.7x P/B, is now sitting at its lowest valuation in nine years.

 

Chart 3: Big-3 banks P/B — priced for a crisis, upside to target ranges from 41% to 60%

This valuation dislocation is not limited to banks. Broadband players WIFI and EXCL have declined 35% to 50% from their peaks despite structurally improving demand driven by AI adoption and accelerating digitalization. Opportunities are also emerging in consumer names, with MYOR offering 35% upside and INDF 45% upside, as early signs of recovery in lower income consumption begin to appear alongside government fiscal support.

With Our Analyst 12 month JCI target standing at 8,648, the gap between price and value has rarely been wider, suggesting that while the current environment is volatile, the market may be pricing in far more pessimism than fundamentals warrant.