Jakarta Stocks Slide as Much as 3.6%; Exchange Chief Says Sentiment, Not Fundamentals, Drives the Move
Main Takeaways
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JAKARTA, Investortrust.id — Indonesia’s benchmark stock index opens 2.6% lower at 7,620.1 on Monday, Sept 1, 2025, then touches an intraday trough at 7,547.56, down 3.6%, in a decline the head of the exchange attributes to market perception rather than any deterioration in corporate or economic fundamentals.
In subsequent remarks, officials refer to the Indeks Harga Saham Gabungan (IHSG) and the domestic bourse, PT Bursa Efek Indonesia (BEI), alongside the financial regulator, Otoritas Jasa Keuangan (OJK). They emphasize that the day’s selloff reflects short-term sentiment, not shifts in core drivers.
BEI President Director Iman Rachman says index moves hinge on two factors—fundamentals and investor perception—and argues that neither listed-company health nor Indonesia’s macro backdrop has weakened.
He points to recent index adjustments by Morgan Stanley Capital International (MSCI) and new inclusions in FTSE Russell indices as evidence of improving breadth and foreign interest.
“Have the fundamentals changed? If anything, MSCI has added constituents. The fundamentals are strong, and what happened is about investor perception, particularly among foreign investors, and the conditions are already improving,” he tells reporters after a joint press briefing on market stability at the exchange building on Monday.
Authorities Urge Rational Investing
OJK’s Chief Executive for Capital Markets, Derivatives and the Carbon Exchange, Inarno Djajadi, asks investors to base decisions on verifiable information and financial statements, not rumor or social-media narratives.
He credits government coordination for keeping trading orderly and reiterates that well-telegraphed policies—such as the standing facility for share buybacks without a shareholder meeting during periods of heightened volatility—are designed to support stability while preserving fair and efficient markets.
“Investors should remain prudent and rely on facts. Confidence matters, and Indonesia is progressing,” he says at the BEI on Monday.
Exchange Keeps Trading Open
As demonstrations in Jakarta draw national attention, BEI’s Director of Trading and Membership Regulation Irvan Susandy explains why the exchange operates as normal.
He says liquidity conditions, market infrastructure and risk controls remain sound, and he highlights upgraded Indonesia weights in MSCI’s rebalancing and fresh FTSE Russell inclusions as positive external validations.
“We are confident the market is fundamentally sound,” he notes, adding that uninterrupted trading supports price discovery and avoids unnecessary dislocations.
Macro Backdrop Remains Resilient
Coordinating Minister for Economic Affairs Airlangga Hartarto acknowledges that the weekend’s social and political tensions heightened uncertainty, but he insists the economy has demonstrated resilience.
Indonesia’s gross domestic product expanded 5.12% year on year in the second quarter of 2025, bringing first-half growth to 4.99%. He also cites the manufacturing Purchasing Managers’ Index improving to 51.5 on stronger output and new orders, while reminding investors that the IHSG notched an all-time high late last week before profit-taking accelerated.
“The decline occurred during Friday’s mass demonstrations. The optimism is still there, and we must safeguard it,” Airlangga says.
Analysts at Indo Premier Sekuritas say investors will track the course of the demonstrations and statements from authorities, as well as any follow-up measures from Bank Indonesia, BEI and OJK to ensure orderly markets. They stress that clear communication and policy continuity can prevent risk aversion from cascading into broader financial conditions.
By late morning, the market’s focus has shifted from initial shock to the underlying question of earnings durability, fiscal-monetary coordination and external demand.
Policymakers argue that Indonesia’s growth profile, a steady pipeline of domestic investment and continued index recognition by global benchmarks should anchor medium-term positioning, even if headline swings remain elevated over coming sessions.
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