Indonesian Stocks Under Pressure: OJK Cites Global Factors, Affirms Market Fundamentals

Indonesia's stock market has experienced considerable pressure, with the Composite Stock Price Index (IHSG) declining significantly in recent months. The OJK reported that the IHSG corrected by 11.92% on a monthly basis and a substantial 29.14% year-on-year as of May 2026. This downturn reflects market responses to a confluence of global and domestic economic factors.

Hasan Fawzi, Head of Capital Market Supervision at the OJK, explained that a key driver of the market's correction was investor portfolio adjustments following announcements of rebalancing by global index providers. "However, there have also been developments in various economic indicators and sentiments, both domestic and global, which have influenced and been factored in by investors," Fawzi stated during a virtual press conference on June 5, 2026.

Fawzi urged investors to observe market dynamics objectively, proportionally, and rationally. He emphasized that the fundamental health of Indonesia's capital market remains robust. This is evidenced by the sustained high levels of transaction value and liquidity in the domestic stock market. Furthermore, financial reports for the first quarter of 2026 indicate that most issuers have maintained positive performance growth.

The OJK will continue to monitor market dynamics closely, particularly in the wake of rebalancing by Morgan Stanley Capital International (MSCI) and FTSE Russell. The OJK, in collaboration with Self-Regulatory Organizations (SROs), will also keep a close watch on the agendas of Global Index Providers. "We will ensure that ongoing capital market reforms continue to be implemented consistently to strengthen the credibility and investment attractiveness of Indonesia's capital market," Fawzi added.