Faisal Maliki Baskoro, Jakarta – The Jakarta Composite Index (JCI) extended its recent downturn over the week of Feb. 2-6, 2026, as concerns over Indonesia's credit outlook, market governance, and global index eligibility weighed heavily on investor sentiment.
The benchmark index fell 4.73% to close at 7,935.2 on Friday, down from 8,329.66 a week earlier. The decline erased roughly Rp 705 trillion ($41.6 billion) in market value, with total capitalization on the Indonesia Stock Exchange (IDX) shrinking 4.69% to Rp 14,341 trillion.
Despite the broader sell-off, foreign investors recorded a net buy of Rp 944.31 billion by the end of the week. However, foreigners remain net sellers on a year-to-date basis, with cumulative outflows totaling Rp 11.02 trillion in 2026.
Brokerage Pilarmas Sekuritas Investindo said market pressure had been building amid scrutiny from global index provider MSCI, but sentiment deteriorated further after Moody's revised Indonesia's sovereign credit outlook to negative from stable. The outlook change amplified concerns over policy predictability, fiscal discipline, and foreign exchange resilience.
Pilarmas warned that failure to address fiscal pressures, weakening reserves, rising debt risks, and lingering capital market transparency issues could accelerate capital outflows. Such risks, the firm noted, would also spill over into the bond market, as sovereign rating concerns directly influence default risk perceptions.
Moody's also pointed to ineffective policy communication as a factor that could undermine governance quality and policy effectiveness. Prolonged deterioration in these areas, Pilarmas said, risks eroding the credibility of Indonesia's long-standing policy framework, which has historically underpinned steady economic growth, macroeconomic stability, and investor confidence.
Fiscal risks have drawn particular attention after authorities raised the budget deficit ceiling to 3% of gross domestic product. Pilarmas highlighted populist spending programs as a potential source of concern if not carefully managed, warning that sustained fiscal slippage could reshape investor perceptions of Indonesia's medium-term investment outlook.
Meanwhile, Indonesian authorities have moved to restore confidence through a sweeping overhaul of capital market regulations, combining tighter trading rules with rare criminal enforcement. Officials say the measures are intended to curb market manipulation and strengthen transparency following recent volatility and MSCI scrutiny.
Chief Economic Minister Airlangga Hartarto has vowed firm action against insider trading and price rigging. Police have since arrested several brokerage executives suspected of manipulating share prices, marking an unusually aggressive enforcement push.
Regulators have also introduced structural reforms, including raising the minimum free float requirement to 15% from 7.5%, tightening ownership disclosure thresholds to 1%, expanding investor classification categories, and publishing monthly free-float reports.