Everyone knows the LQ45 — Indonesia's blue-chip index. But what if there was a better way to find companies worth investing in? Not just big names, but fundamentally strong businesses?
Meet the Horas Index.
What Is the Horas Index?
The Horas Index tracks the top 25 fundamentally sound companies on the Indonesia Stock Exchange (IDX). Instead of just picking the biggest stocks by market cap, it uses a multi-factor scoring system to find companies that are actually healthy, profitable, and positioned for growth.
Think of it as LQ45's smarter cousin.
The Methodology: Four Factors That Matter
Unlike traditional indexes that rely heavily on market capitalization, the Horas Index scores companies across four dimensions:
| Factor | Weight | What It Measures |
|---|---|---|
| Profitability | 30% | ROE, Net Profit Margin |
| Valuation | 20% | PER, PBV vs 5-Year Average |
| Financial Health | 20% | Debt-to-Equity, Interest Coverage |
| Momentum | 30% | Danantara alignment, analyst picks, MSCI movements |
Each company gets a score from 0-100. Only the top 25 make the cut.
Who Made the Cut? (Feb 2026 Edition)
Here are the top 5 constituents by score:
| Rank | Ticker | Company | Score | Weight |
|---|---|---|---|---|
| 1 | BBCA | Bank Central Asia | 95 | 4.47% |
| 2 | BMRI | Bank Mandiri | 92 | 4.33% |
| 3 | BBRI | Bank Rakyat Indonesia | 90 | 4.24% |
| 4 | BREN | Barito Renewables Energy | 90 | 4.24% |
| 5 | PGEO | Pertamina Geothermal | 89 | 4.19% |
Notice something? While the big banks dominate (as expected), you've also got renewable energy plays like BREN and PGEO getting top scores. The methodology rewards companies aligned with Indonesia's Danantara policy priorities.
Why Momentum Matters
The 30% momentum weight isn't just about price charts. It includes:
- Danantara Policy Alignment: Renewable energy, healthcare, and digital transformation champions get priority
- Analyst Upgrades: Stocks with positive momentum from research houses
- MSCI Inclusions/Exclusions: Global index movements that affect fund flows
This means the index adapts. When the government prioritizes healthcare, companies like HEAL (Medikaloka Hermina) rise. When MSCI dumps a stock for ESG reasons, it's penalized here too.
The Rules
- Quarterly Rebalancing: February, May, August, November
- Diversification Cap: No single stock can exceed 15% of the index
- Fast Exit: Poor governance or criminal investigations = immediate removal
- Liquidity Filter: Must trade > IDR 50 billion daily on average
Why This Matters
Most retail investors in Indonesia buy based on tips, rumors, or "tha mass" (crowd psychology). The Horas Index offers something different: a data-driven approach to stock selection.
It's not about predicting the next pump-and-dump. It's about finding companies with:
- Solid profitability
- Reasonable valuations
- Healthy balance sheets
- Momentum from policy tailwinds
The Bottom Line
The Horas Index won't replace the LQ45, and it shouldn't. But for investors who want a structured, fundamentals-first approach to Indonesian equities, it's a compelling alternative.
Whether you're building a watchlist or considering your first IDX investment, the 25 companies in this index represent a good starting point for due diligence.
Remember: This is a tool, not gospel. Do your own research, understand the risks, and never invest money you can't afford to lose.
The Horas Index is updated quarterly. For the latest constituents and methodology, check the full constituent guide.