(1) Accelerating economic growth, (2) a stable rupiah, (3) easing tensions surrounding the Jakarta gubernatorial election and Ahok's blasphemy case, (4) the recent ratings upgrade (to investment grade) by Standard & Poor's, (5) an under-control current account deficit, (6) under-control inflation, as well as (7) the nation's fiscal stability are all cited as factors that boost investor appetite on the Indonesia Stock Exchange.

However, there are also factors that are considered a threat to the performance of Indonesian stocks: (1) unpredictable policies in the USA by the Donald Trump administration, (2) looming further monetary tightening in the USA, (3) rising tensions in the Middle East and North Korea, as well as (4) the bleak crude oil price.

Still, Indonesian securities companies expect the positive factors to compensate more than enough for the negative factors and therefore they expect the Jakarta Composite Index to reach beyond the 6,000 level later this year. So, which Indonesian stocks do they recommend?

Harry Su, Head of Research at Bahana Securities, put the target for the Jakarta Composite Index at 6,300 points in 2017 amid the improving macroeconomic situation of Indonesia and easing domestic political turmoil.

Stock Tips Bahana Sekuritas:

Company  Target Price
Core Business
Astra International      10,000 Automotive
Bank Mandiri      15,000 Bank
Bank Negara Indonesia       8,000 Bank
Semen Indonesia      11,600 Cement
Bank CIMB Niaga       1,500 Bank
Ciputra Development       1,800 Property
Mitra Adiperkasa       8,300 Retail
United Tractors      32,000 Heavy Equipment
Surya Citra Media       3,350 Media
Ramayana Lestari Sentosa       1,440 Department Stores

Source: Bahana Sekuritas

Surya Citra Media and Ramayana Lestari Sentosa were recently added to Bahana Sekuritas' top ten Indonesian stocks as there is regarded more upward growth room for their shares compared to that of Jasa Marga and Summarecon Agung (that were removed from the list). Obvious from the table above, the banking sector is expected to show good growth in 2017.

Meanwhile, Danareksa Sekuritas expects Indonesian shares in the property, plantations, and banking sector to perform well in the second half of 2017, supported by improving purchasing power, stable interest rates, accelerated economic growth, and recovering crude palm oil production volumes.

Stock Tips Danareksa Sekuritas:

Company  Target Price
Core Business
Lippo Karawaci         771 Property
Agung Podomoro Land         206 Property
PP London Sumatra Indonesia       1,543 Palm Oil
Bumi Serpong Damai       1,992 Property
Astra Agro Lestari       1,500 Palm Oil
Eagle High Plantations         259 Palm Oil
Bank Central Asia      20,368 Bank
Bank Rakyat Indonesia       6,872 Bank
Bank Mandiri      14,790 Bank
Bank Negara Indonesia       7,381 Bank

Source: Danareksa Sekuritas

Lastly, Binaartha Parama Sekuritas said it still has not revised its target for the Jakarta Composite Index this year, hence the targets are still at 5,750 - 6,243 (best resistance) and 5,250 - 5,300 (worst resistance).

Stock Tips Binaartha Parama Sekuritas:

Company  Target Price
Core Business
Astra International       9,550 Automotive
Telekomunikasi Indonesia       5,200 Telecommunication
Unilever Indonesia      51,250 Home & Personal Care
Indofood CBP Sukses Makmur       9,850 Food
Charoen Pokphand Indonesia       3,800 Poultry Feed
Indo Tambangraya Megah      20,275 Coal Mining
Tambang Batubara Bukit Asam      14,260 Coal Mining
Indocement Tunggal Prakarsa      20,500 Cement
Bank Rakyat Indonesia      16,550 Bank
Terregra Asia Energy         530 Energy

Source: Binaartha Parama Sekuritas