Indonesian Equities Retreat Sharply as Week Opens

Indonesian stocks rose 28 points, or 0.5%, to 5,402 in early trade on Tuesday, partly recovering from a sharp 1.2% drop in the previous session. Sentiment improved as U.S. equity futures strengthened following an overnight Wall Street rise, after Anthropic’s IPO filing revived AI enthusiasm ahead of major tech earnings and the Federal Reserve’s upcoming rate decision. Domestically, the government assured that fuel supplies remained adequate, with subsidised fuel stocks sufficient for 16–18 days and other fuel inventories above minimum requirements. The remarks eased concerns that rising oil prices could strain fiscal conditions. However, gains were capped by continued rupiah weakness and inflation concerns amid persistently high food prices. Advances were broad-based, led by basic materials, energy, industrials, and consumer cyclicals. Top performers included Chandra Asri (6.2%), Bukit Uluwatu Villa (5.9%), Bank Syariah Indonesia (5.2%), and Rukun Raharja (4.2%).

Indonesian shares slipped 69 points or 1.1% to 5,374 on Monday morning deals, reversing gains in the prior four sessions, as caution prevailed ahead of a busy week of global central bank decisions, including from the Fed. Wall Street Friday fell for the second straight week, reflecting persistent concerns over AI investment. Locally, fiscal worries reemerged amid higher oil prices, given Indonesia’s status as a net oil importer. Most sectors were in the red, with Indosat (- 3.6%), Mitra Adiperkasa (-2.2%), and Aneka Tambang (-1.7%) among major laggards. Still, the downside was capped by a growing IPO pipeline, as nine companies are reportedly seeking listings, with healthcare firms accounting for the largest share. Meanwhile, the Financial Services Authority extended until June 2027 a policy allowing listed companies to conduct share buybacks without prior shareholder approval, aiming to support market stability amid uncertainty over MSCI’s review of Indonesia’s market classification.

Indonesia’s IDX Composite rose 40 points, or 0.7%, to 5,422 in early trading on Friday, up for the fourth session, amid gains in energy, cyclical, industrial, and infrastructure stocks. Sentiment was supported by exchange reforms that will exclude stocks classified as having High Shareholding Concentration from composite index calculations starting Nov. 2. The move follows MSCI warnings that Indonesian equities risk being downgraded from emerging to standalone market status. Meanwhile, several listed companies, including major banks, have launched share buyback programs to restore investor confidence and support sliding valuations. However, gains were capped by fiscal concerns as oil prices hovered around USD 100 per barrel, while accelerating food prices added to inflationary pressures. Bukit Asam rose 3.5%, along with Astra Intl. (2.9%), and XLSmart Telecom (2.5%). For the week, the index was on track to rise around 4%, partially recovering from a nearly 15% plunge in the prior week.