KIWOOM Morning Equity – 28 October 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. AI RALLY BOLSTERS GLOBAL OPTIMISM, FED AND ECB IN FOCUS, INDONESIA FACES RISING FISCAL RISKS US MARKET: The US stock market closed higher on Tuesday (10/27/26). S&P 500 index rose 0.60% to 7,722.60, Nasdaq Composite strengthened 1.18%, while Dow Jones Industrial Average edged up 0.03%. Broadcom surged 4% after the announcement of US$63 billion in financing by a banking consortium and Blackstone related to Anthropic's use of its technology. Oracle strengthened 3.6% amid an expanded partnership with OpenAI, while Dell Technologies rose 7.47% and Super Micro Computer strengthened 7.34%. In contrast, Boeing plunged 10.69% after recording a third-quarter loss larger than market expectations. INDONESIA: The government is considering reinstating electricity tariff discounts, adding subsidized fuel (BBM) supply, and offering airfare discounts ahead of Christmas and New Year (Nataru) to curb inflation and maintain public purchasing power. However, Fitra cautioned that the stimulus needs to take into account limited fiscal space and the additional energy subsidy burden. The government is advised to prioritize assistance for poor and vulnerable households, as well as strengthen food security, smooth distribution, and optimize market operations so that inflation control is more sustainable. - In addition, the Ministry of Finance is optimistic that the 2026 state budget (APBN) deficit will remain under control at 2.85% of GDP, even though the Rupiah has weakened to Rp18,156 per US Dollar and Brent oil prices have reached US$115.81 per barrel. CORE Indonesia estimates that fiscal space toward the 3% of GDP deficit limit is only about Rp39 trillion left. The rise in oil prices and the weakening of the Rupiah could add energy subsidy and compensation needs of Rp30 trillion-Rp50 trillion above the government's outlook in the fourth quarter of 2026. Taking into account state revenue growth and the potential for spending that is not fully absorbed, the deficit is projected to reach 2.85%–2.95% of GDP by the end of the year. The government also needs to be wary of the risk of delayed compensation payments to Pertamina and PLN, as this step only shifts the fiscal burden to the following year. JCI closed 1.99% lower at 5,266.13 in Tuesday's trading (10/27/26). Foreign investors recorded net sell of Rp708.88 billion in the regular market, and net sell of Rp668.26 billion across all markets, while cash and negotiated transactions recorded net buy of Rp40.62 billion. Accumulated foreign net sell on a YTD basis reached Rp124.93 trillion. The heaviest foreign selling pressure occurred in BMRI, TLKM, BBNI, BRIS, BBCA, PGAS, DSSA, ANTM, ITMG, and TPIA. Meanwhile, the largest foreign inflows were recorded in CPIN, MDKA, ASII, BUMI, SINI, AMMN, JSMR, UNTR, PWON, and ESSA. The Rupiah weakened and stayed above Rp18,158 per US Dollar, near its weakest level since late July, amid a stable dollar ahead of the Fed's decision. Technically, JCI broke down the 5,317 level again and is vulnerable to continuing the downtrend. The RSI (14) fell again to 31.6. JCI is expected to be vulnerable to continuing to test the nearest support at 5,185. If it breaks down, JCI could continue toward support at 5,012 / 4,980. Meanwhile, if JCI rebounds, the nearest resistance is at the 5,317 level; if it is able to break, JCI could return to the resistance range of 5,349 / 5,418. Investors are advised to remain cautious, apply a buy on weakness strategy selectively, and wait for further confirmation before accumulating more aggressively.