KIWOOM Morning Equity – 21 August 2026 This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. US YIELDS RISE & HORMUZ RISKS ESCALATE, JCI MAINTAINS ITS MOMENTUM US MARKET: Wall Street closed lower in Thursday's trading (08/20/26), after a U.S. government bond rally triggered by the Treasury's move to increase long-term bond buybacks reversed course and yields rose again. S&P 500 fell 0.87% to 7,641.16, Nasdaq Composite weakened 1.00% to 26,067.17, while Dow Jones Industrial Average corrected 1.32% to 52,759.21. Sentiment was also weighed down by rising oil prices, inflation concerns, and mounting fiscal worries after U.S. government debt surpassed US$40 trillion. INDONESIA: The government's target to push economic growth close to 6% in 2027 faces challenges from increasingly limited fiscal space and declining productive spending. In the 2027 State Budget Draft (RAPBN), capital expenditure was slashed by nearly 20% to Rp295.2 trillion from the 2026 outlook of Rp367.4 trillion, while employee spending rose to Rp625.2 trillion and debt interest payments increased to Rp650.3 trillion. PermataBank Chief Economist Josua Pardede assessed that this condition creates tension in the budget design because the government is targeting higher growth, yet spending that directly enhances economic capacity is actually decreasing. He estimates 2027 economic growth at only around 5.22%, meaning the government needs to protect high-leverage spending such as infrastructure, education, health, technology, and skills enhancement. - Additionally, the government and the House of Representatives (DPR RI) Budget Board (Banggar) have completed Level I Discussions on the Accountability Bill for the Implementation of the 2025 State Budget (RUU P2 APBN), with all factions agreeing to proceed to Level II Discussions or decision-making in the DPR RI Plenary Session. Minister of Finance Purbaya Yudhi Sadewa considered the 2025 RUU P2 APBN important for strengthening the governance and foundation of state financial management, while also serving as an evaluation material through various views and recommendations from factions and the Working Committee. JCI closed up 1.68% at the 6,501.59 level on Thursday (08/20), moving within the range of 6,444.40 – 6,514.68. Foreign investors recorded a net buy of Rp733.69 billion in the Regular Market and Rp680.47 billion across all markets. The largest foreign capital inflows went to AMMN, BBRI, ANTM, BRMS, and PSAB, while the largest selling pressure was recorded in DSSA, BMRI, EMAS, BBNI, and TPIA. In the foreign exchange market, the Rupiah strengthened 0.14% to the level of Rp17.775 per U.S. Dollar, continuing the strengthening trend as the U.S. Dollar index hovered near a three-month low following the U.S. government's expansion of its bond buyback program to lower long-term borrowing costs. Technically, JCI still shows bullish momentum after staying above EMA10 (6,382.13), EMA20 (6,313.92), and EMA50 (6,294.78). The index's position holding above all moving averages indicates that the short- to medium-term trend remains positive and buying pressure stays dominant. RSI (14) is at 62.47, still in the bullish zone but not yet entering the overbought area, leaving room for further gains although investors need to watch out for potential profit-taking actions after a quite significant increase. If JCI manages to break through and hold above the 6,515 resistance, the potential for gains could continue towards 6,598 and 6,723. Conversely, if a correction occurs, the 6,382 – 6,377 area becomes the nearest support that needs to be maintained, followed by 6,314 – 6.295 which is the EMA20 and EMA50 area. As long as JCI stays above the 6,295 area, the bullish structure remains relatively intact. KIWOOM RESEARCH suggests investors can selectively maintain positions by implementing a trailing stop, while buy accumulation should preferably be done gradually during corrections as long as the index holds above that support.