Faisal Maliki Baskoro, Jakarta – Indonesia's benchmark stock index posted a steep weekly decline, pressured by global uncertainty, currency weakness and a review by MSCI.
The Jakarta Composite Index (JCI) fell 6.61% over April 20-24 to close at 7,129.49, down from 7,643.00 a week earlier, according to the Indonesia Stock Exchange.
Market capitalization dropped in line with the index, shedding Rp 899 trillion ($52.11 billion), or 6.59%, to Rp 12,736 trillion from Rp 13,635 trillion.
Trading activity, however, picked up. Average daily transaction volume rose 4.44% to 44.88 billion shares from 42.98 billion shares a week earlier, while average daily transaction frequency increased 1.09% to 2.75 million trades.
Foreign investors remained net sellers, offloading about Rp 2 trillion worth of equities on the final trading day of the week. Year-to-date, overseas investors have recorded net sales of Rp 42.81 trillion, underscoring persistent capital outflows from Indonesian assets.
MSCI said it is reviewing a new set of capital market transparency reforms introduced by Indonesian authorities, while maintaining existing constraints on local equities following earlier concerns that triggered a market sell-off.
The reforms, rolled out by the Financial Services Authority, IDX and the Indonesia Central Securities Depository, include stricter disclosure requirements for shareholders owning more than 1%, enhanced investor classification, the introduction of a High Shareholding Concentration framework, and a roadmap to increase the minimum free float requirement to 15%.
MSCI said it is assessing the scope, consistency and effectiveness of the measures, particularly in relation to free-float calculations and overall market investability.
On the domestic front, sentiment has been weighed down by rising non-subsidized fuel prices, which are eroding purchasing power, particularly among middle-income consumers. Risks of further increases remain if global oil prices continue to climb.
Losses were partly cushioned after Bank Indonesia kept its benchmark interest rate unchanged at 4.75% for a seventh straight month, signaling a cautious stance amid global volatility.
The rupiah closed at Rp 17,229 per US dollar on April 24, strengthening 57 points from the previous close of Rp 17,286 after briefly weakening earlier in the session. In morning trade, the currency had already gained 5 points, or 0.03%, to Rp 17,281.
Pilarmas Investindo Sekuritas attributed the decline to escalating global uncertainty, including stalled negotiations between the United States and Iran, which have weighed on regional markets and prompted investors to retreat from risk assets.
"External pressures have made market sentiment fragile and triggered selling across exchanges,
Geopolitical tensions in the Middle East continue to cloud the outlook, particularly disruptions in the Strait of Hormuz, a key global energy corridor. Incidents such as ship seizures and port blockades linked to Iran have pushed energy prices higher and heightened global inflation risks, further dampening appetite for emerging market equities.
Source: https://jakartaglobe.id/business/indonesia-market-sinks-66-in-a-week-52-billion-wiped-ou