Jakarta – Indonesian stocks experienced a significant downturn on , with the Jakarta Composite Index (IHSG) closing down 2%, marking a substantial drop in market confidence. The index finished the trading day at 7,935.26, a decrease of 168.62 points.
The sell-off saw 673 shares decline, while only 118 managed to gain value, and 167 remained unchanged. Despite an initial steeper decline of 2.83% during the session, the index partially recovered towards the close of trading.
Total transaction value reached Rp 19.2 trillion, involving 32.74 billion shares traded across 2.2 million transactions. Market capitalization was eroded to Rp 14,341 trillion. Trading volume was notably lower than recent weeks, suggesting a “wait and see” approach among investors amid heightened market volatility.
Average daily transaction value in the first week of January stood at Rp 31.46 trillion, increasing to Rp 32.68 trillion and Rp 33.85 trillion in subsequent weeks. The peak in transaction value occurred between , driven by investor selling pressure following announcements from Morgan Stanley Capital International (MSCI).
Blue-chip stocks were the primary drivers of the index’s decline. Bank Central Asia (BBCA) fell 1.6% to 7,675, contributing a negative 11.84 index points. Bank Rakyat Indonesia (BBRI) and Astra International (ASII) also weighed heavily on the index, subtracting 11 and 10.24 index points respectively.
Despite the overall negative sentiment, foreign investors recorded a net buy of Rp 440.7 billion during the first trading session. Foreign purchases totaled Rp 3.5 trillion, while sales reached Rp 3.1 trillion. Bank Mandiri (BMRI) was the most favored stock among foreign investors, with a net buy of Rp 274.2 billion, despite a 1.19% price correction.
Telkom (TLKM) and Antam (ANTM) also attracted significant foreign investment, with net buys of Rp 118.3 billion and Rp 105.6 billion, respectively. Shares of Bumi Resources (BUMI) and Bumi Resources Minerals (BRMS), both affiliated with the Bakrie Group, also featured among the top ten stocks with the largest net foreign purchases.
The downturn was largely attributed to Moody’s Investors Service’s decision to maintain Indonesia’s sovereign credit rating at Baa2, but to revise the outlook from stable to negative. This adjustment reflects concerns regarding the clarity surrounding the government’s fiscal policies and the operational framework of Badan Pengelola Investasi (BPI) Daya Anagata Nusantara (Danantara), the newly established sovereign wealth fund.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, acknowledged the negative outlook, attributing it to a lack of comprehensive explanation regarding the shift in government spending priorities and the role of Danantara. He highlighted that the 2026 budget allocates significant resources to flagship programs initiated by the current administration, including a free nutritious meal program, village cooperative development, and public services.
Hartarto explained that economic growth is now expected to be driven by investment channeled through Danantara, rather than through the state budget, a change that has not been fully understood by international rating agencies and financial markets. He emphasized that Danantara is intended to facilitate reforms within state-owned enterprises, enabling them to operate with greater autonomy and efficiency, similar to the private sector.
Hartarto believes that improved communication, transparency, and investor roadshows can address concerns raised by rating agencies like Moody’s, S&P, and others. Rosan Roeslani, CEO of Danantara Indonesia, echoed this sentiment, stating that the outlook revision should be viewed as a constructive reminder to strengthen institutional foundations, clarify policy direction, and maintain fiscal discipline to preserve long-term confidence and stability.
The Indonesian government is now focused on addressing these concerns and providing greater clarity to international investors regarding its economic policies and the role of Danantara in driving future growth. The broader global economic context, as outlined by Moody’s, suggests a subdued growth outlook for 2026 and 2027, with global real GDP growth expected to hover around 2.5%, down from 2.6% in the current year and 2.8% in 2024. This global slowdown adds to the challenges facing the Indonesian economy as it navigates these recent developments.
