Nomura Holdings raises Indonesia stock rating to overweight, optimistic about interest rate cuts and domestic demand growth.

Nomura has raised its recommendation for Indonesian stocks to overweight, citing attractive valuations and domestic policy support for growth. Nomura strategist Chetan Seth wrote, "The market has underperformed significantly in the past, and the rate cut cycle by the central bank is a positive signal for domestic stocks. Concerns at the start of the year about the independence of Bank Indonesia, fiscal credibility, policy uncertainty, and sluggish government spending are expected to gradually ease." At the same time as the brokerage firm's upgrade, Indonesian Finance Minister Purbaya pledged to boost fourth quarter economic growth through cash aid and government spending. Since August, Indonesia's stock benchmark index has hit multiple historical highs, with a year-to-date increase of 22%, almost matching the 23% increase in the MSCI Asia Pacific index.