Alpha Picks
Strategy - Alpha Picks: Sep 26 Alpha Picks: Strong August Rally; Selective Thematic Opportunities
Highlights
- Alpha picks outperformed in August. Our 10 stock picks returned 8.9%, outperforming the JCI’s 6.3% gain by 2.6%, led by ARCI and EXCL.
- Global headwinds favour selective thematic exposure. Higher global bond yields and oil prices could pressure the rupiah and constrain BI’s policy flexibility, while RKAB revisions, El Niño and DC investment offer stock-specific opportunities.
- Retain our alpha picks. With the risk from the Fed meeting on 16-17 Sep 26, we remain constructively balanced between high- and low-beta names and retain our alpha picks: AMMN, ARCI, ASII, BBCA, BMRI, BULL, CMRY, ELSA, INKP and EXCL.
What’s New
- JCI gained 6.3% mom in Aug 26, supported by a 1.7% appreciation in the rupiah and a strong rotation into commodity- and infrastructure-related stocks. Basic materials, energy, infrastructure and property led the market, rising 11.8%, 11.5%, 9.7% and 8.0% respectively, while technology and industrials lagged at -0.5% and 1.4% respectively. Our 10 stock picks generated an average return of 8.9%, outperforming the JCI by 2.6%, as the rally was concentrated in higher-beta thematic names. ARCI (+26.8%) was the strongest performer due to higher gold prices in August, followed by EXCL (+17.2%), AMMN (+7.3%) and INKP (+6.4%); CMRY (+6.7%) was supported by solid 2Q26 earnings and an interim dividend announcement. ELSA (+5.3%) also gained on strong 1H26 earnings, its share-buyback programme and positive energy-sector sentiment. Meanwhile, BMRI (+2.6%), BBCA (+4.0%), BULL (-0.1%), and ASII (-4.2%) lagged the benchmark.
- From global yields to El Nino: September’s key market drivers. We see the following four themes shaping the JCI in Sep 26:
- First, higher global bond yields and oil prices represent the main market-wide risk, potentially pressuring the rupiah, while limiting Bank Indonesia’s (BI) room to ease.
- Second, revised work plan and budget (RKAB) approvals for commodities companies will determine how much production miners can restore, while China’s winter restocking and potential coal-for-hydro substitution during El Nino should support regional coal demand.
- Third, a potential strong-to-very-strong El Nino creates broader implications for energy security, food inflation and water availability: it is potentially positive for coal and CPO, but negative for hydropower, FMCG input costs and water-intensive operations.
- Finally, Indonesia’s data centre (DC) ecosystem remains an attractive structural theme across power, industrial estates, fibre, cooling and water infrastructure. However, as valuations begin to reflect the narrative, further upside should increasingly depend on projects securing customers, power, water, financing and actual contract awards.
Highlights
- Alpha picks outperformed in August. Our 10 stock picks returned 8.9%, outperforming the JCI’s 6.3% gain by 2.6%, led by ARCI and EXCL.
- Global headwinds favour selective thematic exposure. Higher global bond yields and oil prices could pressure the rupiah and constrain BI’s policy flexibility, while RKAB revisions, El Niño and DC investment offer stock-specific opportunities.
- Retain our alpha picks. With the risk from the Fed meeting on 16-17 Sep 26, we remain constructively balanced between high- and low-beta names and retain our alpha picks: AMMN, ARCI, ASII, BBCA, BMRI, BULL, CMRY, ELSA, INKP and EXCL.
What’s New
- JCI gained 6.3% mom in Aug 26, supported by a 1.7% appreciation in the rupiah and a strong rotation into commodity- and infrastructure-related stocks. Basic materials, energy, infrastructure and property led the market, rising 11.8%, 11.5%, 9.7% and 8.0% respectively, while technology and industrials lagged at -0.5% and 1.4% respectively. Our 10 stock picks generated an average return of 8.9%, outperforming the JCI by 2.6%, as the rally was concentrated in higher-beta thematic names. ARCI (+26.8%) was the strongest performer due to higher gold prices in August, followed by EXCL (+17.2%), AMMN (+7.3%) and INKP (+6.4%); CMRY (+6.7%) was supported by solid 2Q26 earnings and an interim dividend announcement. ELSA (+5.3%) also gained on strong 1H26 earnings, its share-buyback programme and positive energy-sector sentiment. Meanwhile, BMRI (+2.6%), BBCA (+4.0%), BULL (-0.1%), and ASII (-4.2%) lagged the benchmark.
- From global yields to El Nino: September’s key market drivers. We see the following four themes shaping the JCI in Sep 26:
- First, higher global bond yields and oil prices represent the main market-wide risk, potentially pressuring the rupiah, while limiting Bank Indonesia’s (BI) room to ease.
- Second, revised work plan and budget (RKAB) approvals for commodities companies will determine how much production miners can restore, while China’s winter restocking and potential coal-for-hydro substitution during El Nino should support regional coal demand.
- Third, a potential strong-to-very-strong El Nino creates broader implications for energy security, food inflation and water availability: it is potentially positive for coal and CPO, but negative for hydropower, FMCG input costs and water-intensive operations.
- Finally, Indonesia’s data centre (DC) ecosystem remains an attractive structural theme across power, industrial estates, fibre, cooling and water infrastructure. However, as valuations begin to reflect the narrative, further upside should increasingly depend on projects securing customers, power, water, financing and actual contract awards.
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