KIWOOM Morning Equity – 15 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. HOTTER US INFLATION WEIGHS ON GLOBAL MARKETS, INDONESIA EXPANDS ISLAMIC FINANCE AND SUPPORTS PURCHASING POWER US MARKET: Wall Street closed lower on Wednesday (14/10/26), after higher-than-expected US inflation data sparked concerns over the direction of monetary policy and technology stock valuations. S&P 500 index fell 1.1%, Nasdaq Composite weakened 2%, while Dow Jones Industrial Average corrected 49 points. Semiconductor stocks were the main drag after ASML stated it was struggling to meet demand for chip manufacturing equipment, amid growing competition from Chinese producers. Nvidia fell 3.2%, Broadcom weakened 3.1%, Micron corrected 4.1%, and AMD tumbled 5.7%. In the financial sector, Bank of America fell 4.8% due to trading revenue below expectations, while Morgan Stanley weakened 2.7%. In contrast, BlackRock strengthened 0.7% on increased fund inflows into its asset management business. INDONESIA: Bank Indonesia (BI) is encouraging the development of more varied Islamic financial products to capture high demand from global investors. BI Governor Destry Damayanti said sukuk hold appeal for investors from non-Muslim countries, including the US and Europe, as they are considered sustainable and backed by an underlying asset. Since 2018, Indonesia's Green Sukuk issuance in the global market has reached US$7.7 billion, while domestic market issuance has reached Rp108.9 trillion. Diversification of Islamic instruments could potentially broaden the investor base, deepen the domestic financial market, and support financing for sustainable projects. In the long term, increased participation from global investors could also strengthen capital inflows, although the impact on the rupiah and bond yields will continue to depend on global market conditions and perceptions of Indonesia's risk. * In addition, the government is targeting the setting of the 2027 Minimum Wage no later than the end of November 2026, with the process still awaiting new labor-related regulations. The wage formula will take into account economic growth, inflation, and an alpha index determined by the Wage Council, balancing the interests of workers and employers as well as the ratio of the minimum wage to the decent living needs (KHL) standard. For the market, a minimum wage increase could potentially support purchasing power and household consumption, but could also raise labor costs and pressure corporate margins, particularly in labor-intensive sectors. The size of the wage increase and the clarity of the regulation will be important factors for inflation expectations, issuers' earnings outlook, and business investment decisions. JCI closed up 0.29% at 5,943.02 in Wednesday's (14/10) trading. However, foreign investors still recorded a net sell of Rp1.13 trillion across all markets, consisting of Rp104.01 billion in the regular market and Rp1.03 trillion in the cash and negotiated markets. On a YTD basis, accumulated foreign net selling reached Rp111.29 trillion. Foreign fund flows mainly went into BBCA, BRPT, TINS, MEDC, PWON, PGAS, SMGR, ASII, AALI, and ACES, while the largest selling pressure occurred in BBRI, BMRI, ADMR, ITMG, PTBA, DSSA, BUMI, EMAS, AADI, and ERAA. In the foreign exchange market, the Rupiah strengthened slightly to around Rp17,890 per US Dollar after moving within a limited range over the past few sessions. Bank Indonesia continues to intervene through the spot market, Domestic Non-Deliverable Forward (DNDF), and offshore Non-Deliverable Forward (NDF) to maintain exchange rate stability. Technically, JCI has touched its nearest resistance area but has not yet been able to hold above it. The RSI (14) indicator rose to the 34.2 level. If the gains continue, JCI has the chance to test the 5,979, 6,009, and up to 6,120 levels. Conversely, if it fails to break through 5,979 or breaks down below support at 5,906, the index could potentially weaken toward 5,850. If pressure continues, the next support lies in the 5,805 – 5,774 area, which is a gap zone. KIWOOM RESEARCH recommends a buy on weakness strategy, with a trading buy opportunity should JCI's movement show a renewed upward tendency.