IHSG Plunges Mid-Demonstration; Foreign Shares Take a Hit

Indonesian Stocks Decline as Protests Continue; Foreign Investors Sell

Jakarta – The Indonesian Composite Stock Price Index (CSPI) closed lower Monday as demonstrations continued across the nation.The benchmark index fell 1.21%, marking a decline of 94.42 points to reach 7,736.07.

Total transaction value reached Rp 23.51 trillion. Approximately 38.77 billion shares were traded in 2.31 million transactions. A total of 539 shares decreased in value, 171 shares increased, and 99 remained unchanged.

Foreign Investor Sentiment Shifts

The trading day saw considerable activity, with a transaction value of Rp 16.63 trillion involving 44.48 billion shares across 2.08 million transactions. Notably, 377 shares saw gains, while 288 experienced declines, and 99 remained stable.

A considerable net foreign sale of Rp 2.16 trillion was recorded throughout the market session. Of this amount, Rp 2.14 trillion occurred in the regular market, and a further Rp 14.80 billion in negotiation and cash markets.

Stocks Facing the Most Pressure

Which stocks bore the brunt of the selling pressure amid the ongoing unrest? Here’s a look at the ten most heavily discarded shares, according to stockbit data:

Company	Ticker	Net Sell (Rp Trillion)
PT Bank Central Asia Tbk.	BBCA	1.60
PT Bank Mandiri (Persero) Tbk.	BMRI	0.734
PT Bank Rakyat indonesia (Persero) Tbk.	BBRI	0.110
PT Solusi Sinergi Digital Tbk.	WiFi	0.078
PT Telkom Indonesia (Persero) Tbk.	TLKM	0.078
PT Alamri Resources Indonesia Tbk.	ADRO	0.039
PT Merdeka Copper Gold Tbk.	MDKA	0.039
PT J Resources Asia Pacific Tbk.	PSAB	0.037
PT Kalbe Farma tbk.	KLBF	0.033
PT TBS Energi Utama Tbk.	Toba	0.024

Did You Know? indonesia’s stock market, the IHSG, is considered one of the most promising emerging markets in Southeast Asia, but is frequently enough sensitive to both global economic trends and domestic political stability.

Understanding Market Reactions to Political Events

Political instability and social unrest often lead to increased investor risk aversion. Investors tend to move toward safer assets, triggering sell-offs in stock markets like the CSPI. This is especially true in emerging markets, where political risks are often perceived as higher. The recent decrease in the CSPI highlights this dynamic, as investors react to the ongoing demonstrations by reducing their exposure to Indonesian equities.

Pro Tip: Understanding the correlation between political events and market performance is crucial for investors. Diversifying portfolios and staying informed about geopolitical developments are vital strategies for mitigating risk.

What factors do you believe are driving foreign investor behaviour in the current indonesian market?

How might these market fluctuations impact long-term investment strategies in Indonesia?

Share your thoughts in the comments below and let us know how you’re interpreting these market signals!

What specific goverment interventions, beyond liquidity support, might the OJK implement to stabilize the Indonesian stock market?

Immediate market reaction: Jakarta Composite Index (IHSG) Decline

The Indonesia stock Exchange (IDX) experienced a significant downturn today, september 2nd, 2025, with the jakarta Composite Index (IHSG) plummeting during ongoing demonstrations in Jakarta. initial reports indicate a drop of 3.7% by midday trading, triggering automatic circuit breakers and halting trading temporarily. This sharp decline reflects investor anxiety surrounding potential economic disruption and policy uncertainty. Key sectors impacted include financials, consumer goods, and infrastructure.

IHSG Performance: Currently down 3.7% at 6,850 points (as of 13:00 local time).

Trading halt: Temporary suspension of trading implemented due to the circuit breaker activation.

Market Volatility: The VIX (Volatility Index) for Indonesian markets has spiked to 28, indicating heightened risk aversion.

Foreign Investor Sentiment & Capital Outflow

Foreign investors have been particularly active in selling off Indonesian assets. Data from the IDX shows a net outflow of IDR 8.2 trillion (approximately USD 520 million) in the morning session alone. This exodus is largely attributed to concerns over:

Political Stability: The demonstrations, while largely peaceful, raise questions about the long-term political landscape.

policy Uncertainty: Potential shifts in government policy following the protests are creating uncertainty for foreign businesses.

Currency Risk: The Indonesian Rupiah (IDR) has weakened against the US Dollar,increasing the risk for foreign investors. Currently trading at 15,750 IDR/USD.

Emerging Market Risk: Broader concerns about emerging market vulnerabilities are exacerbating the situation.

Sector-Specific Impacts: Identifying Vulnerable industries

While the entire IHSG is feeling the pressure, certain sectors are disproportionately affected.

Financial sector

Banks and financial institutions are facing increased scrutiny. Concerns center around potential loan defaults if the economic slowdown persists. Major players like Bank Central Asia (BBCA) and Bank Rakyat Indonesia (BBRI) saw their share prices decline by 4.5% and 5.2% respectively.

Consumer Goods

Disruptions to supply chains and reduced consumer spending due to the demonstrations are impacting the consumer goods sector. Companies like Indofood Sukses Makmur (INDF) and Unilever Indonesia (UNVR) experienced moderate declines.

Infrastructure

Infrastructure projects, frequently enough reliant on foreign investment, are facing delays and potential cancellations. This has negatively impacted companies like Telkom Indonesia (TLKM) and Waskita Karya (WSKT).

Regional Market contagion & Global Implications

The IHSG’s decline is not isolated. Regional markets, particularly in Southeast Asia, are also experiencing downward pressure. The Singapore Straits Times Index and the Malaysian KLCI are both down approximately 1.2% and 1.8% respectively.

Asian Markets: Broader Asian markets are reacting cautiously, with the Nikkei 225 and the Hang Seng Index showing modest declines.

Global Impact: While the direct impact on global markets is limited, the situation highlights the increasing interconnectedness of emerging markets and the potential for contagion.

Commodity Prices: Crude oil prices have remained relatively stable, but analysts are monitoring the situation closely for potential disruptions to Indonesian oil production.

Past Precedents: Lessons from Past Demonstrations

Indonesia has a history of political demonstrations impacting its financial markets.

1998 Asian Financial Crisis: Large-scale protests contributed to the downfall of President Suharto and triggered a severe economic crisis.

2019 student Protests: Demonstrations against controversial legislation led to a temporary decline in the IHSG, but the market recovered relatively quickly.

Key Takeaway: The severity of the market reaction depends on the scale and duration of the protests, as well as the government’s response.

investor Strategies: Navigating the Current Volatility

Given the current market conditions, investors should consider the following strategies:

1. Reduce Exposure: Consider reducing exposure to Indonesian equities, particularly in the most vulnerable sectors.
2. Diversify Portfolio: Diversify your portfolio across different asset classes and geographies to mitigate risk.
3. Focus on Long-Term Value: Avoid panic selling and focus on companies with strong fundamentals and long-term growth potential.
4. Monitor Developments: Stay informed about the evolving situation and adjust your investment strategy accordingly.
5. Consider Defensive Stocks: Shift towards defensive stocks (utilities, healthcare) that are less sensitive to economic cycles.

Regulatory Response & Government Intervention

the Indonesian government and the Financial Services Authority (OJK) are closely monitoring the situation. The OJK has issued a statement assuring investors that it is indeed taking steps to maintain market stability. Potential interventions include:

Liquidity Support: Providing liquidity support to banks