By Eko B. Supriyanto, Chairman of Infobank Media Group
Even though President Prabowo Subianto has never opened or closed stock trading, Indonesia’s capital market report card is still bright blue. Throughout 2025, the Composite Stock Price Index (IHSG) reached 8,646.94, an increase of 22.13 percent. Stock capitalization exceeded Rp15,849 trillion. The number of investors exceeded 20.2 million. In fact, Finance Minister Purbaya Yudhi Sadewa estimates that by the end of 2026, the IHSG will exceed 10,000. This is remarkable.
However, behind this, a number of analysts say that there is still a “time bomb”. Indonesia’s blue chip capital market is dancing on a narrow stage. The rising IHSG is often not a reflection of the health of the national economy’s fundamentals. Rather, it is the result of the appreciation of the shares of a handful of large conglomerates.
Groups such as Prajogo Pangestu (energy and nickel stocks), Anthoni Salim (Salim Group), Sinar Mas Group, and Boy Thohir (Adaro Group) have become the dominant “driving force” behind the index. According to the results of a limited discussion by the Infobank Institute, this is a dangerous pattern. It is reminiscent of “narrow capitalism.”
According to the results of a limited discussion by the Infobank Institute, there are at least five latent dangers that need to be considered.
What are the long-term dangers?
First, a market driven by a few giant stocks creates an illusion of stability. In fact, the market is very vulnerable to liquidity fluctuations or changes in sentiment towards one or two conglomerates. This is like building a tower on a small but large foundation, rather than on a large and broad foundation.
Second, the rise of these conglomerate stocks is often driven by external factors. Such as global commodity prices, the EV battery supply chain for nickel. Also, protective government policies, rather than inclusive innovation or productivity. As a result, there can be a wide gap between stock market performance and the real conditions of MSMEs, labor-intensive sectors, and people’s purchasing power.
Third, as is often the case, a concentrated capital market will attract excessive domestic and foreign capital flows to these conglomerate sectors (natural resources, plantations). Other crucial sectors such as medium-tech manufacturing, health, education, and food agriculture become undercapitalized because they are considered less “sexy” to the market.
Four, the dominance of New Order-era conglomerates with complex cross-ownership structures often stifles competition. Startups and emerging companies struggle to grow large, as the ecosystem is dominated by established giants. Innovation is hindered.
Fifth, there is potential for systemic vulnerability. Indonesia’s economy, including its capital market, remains captive to the commodity boom-and-bust cycle. When global commodity prices fall (as may happen if a global recession hits), these driving stocks will collapse and drag the entire index down without any support from other strong sectors.
Bank Stock Stagnation, a Bad Sign
According to Infobank records, bank stocks, which are usually a barometer of the health of the real economy (credit, consumption, investment), have been stagnant. This is a very serious warning sign. It indicates several things.
First, sluggish credit growth. Banks are stagnant because credit demand from the business world (except from large conglomerates that have access to global capital markets) is not as strong as expected. This is a signal that the real economy outside the conglomerate circle is not performing well.
According to Infobank Research Bureau records, the increase in the amount of money in circulation with the intention of boosting economic growth has resulted in an increase in undisbursed loans. Just look at the figures for November 2025, which have skyrocketed to Rp2,509.4 trillion. This is an increase from Rp2,372.1 trillion or 22.71 percent in August 2025. Clearly, the business world is not confident about its prospects. It is uncertain and hesitant about recent political developments.
Meanwhile, the credit growth figure (November 2025) from the same data shows a growth of 7.74 percent. This figure is lower than the same period in 2024, which was 10.79 percent. So, it can be said that apart from low credit demand, there has been a sale and purchase of credit from Himbara banks to smaller banks with the lure of lower interest rates and higher credit limits.
Second, there is a tendency for margins to be squeezed. Competition for deposits is high, while lending rates are competitive. Coupled with increased credit risk amid global uncertainty, bank margins are under pressure. Business risks are increasing due to business uncertainty. The real sector is not only sluggish, but paralyzed.
In short, stagnant banks are a reflection of an economy that is at a standstill for most businesses.
What Should Investors Be Wary Of?
According to Infobank records, the Indonesian capital market has never truly undergone a reset. The ownership structure and political connections of the New Order-era conglomerates remain firmly in place. They have only undergone metamorphosis and regeneration (to a new generation such as Boy Thohir). Government policies often—consciously or unconsciously—protect and strengthen them through licenses, regulations, and fiscal incentives.
To be honest, there is a kind of political capitalism. There is a mutualistic symbiosis between political forces and conglomerates. Political forces need a fast and predictable engine of economic growth (and source of funding), which is provided by large conglomerates. Conglomerates need regulatory certainty and access. This cycle reinforces concentration and hinders economic democratization.
So, at the very least, investors need to pay attention to several things. One, the danger of a delayed major correction (a market correction waiting to happen). Retail investors must be aware that they are walking on thin ice. The current valuations of “market-moving” stocks are very expensive (overvalued) and highly correlated with geopolitical risks and global commodity prices.
Second, the risk of sudden liquidity. Experience shows that when foreign capital flows reverse due to global situations, these highly liquid stocks will be the first to be sold. Retail investors who are trapped at the peak will suffer huge losses.
Three, pay attention to policy and regulatory risks. Oligarchic power is vulnerable to political policy changes. Scandals, regime changes, or social pressure for redistribution can suddenly change the rules of the game. This period of government transition poses a potential risk.
Four, focusing on conglomerate stocks causes investors to miss opportunities in under-the-radar sectors that may be more sustainable in the long term.
What should be done?
According to the Infobank Institute, this is not only the responsibility of investors, but more importantly, the responsibility of regulators (OJK, IDX) and policymakers (government, DPR). However, at the very least, investors, especially retail investors, need to radically diversify.
Of course, don’t get caught up in stocks that are in the news. Look for value in undervalued stocks in other fundamental sectors (health, wet consumption, non-import infrastructure).
Invest based on fundamental analysis, not trends. This goes back to the basics of company analysis: governance, financial reports, and independent business prospects.
The JCI should be used as a reference only, not as a god. This means understanding the composition of the index. Realize that a rising JCI does not mean that your portfolio must follow suit.
In line with this, regulators need to continue to deepen the market. For example, the OJK and IDX must aggressively encourage companies from the non-conglomerate middle sector to go public. This includes the technology and services sectors. Of course, this requires incentives and facilities.
Finally, the blue report card for the capital market is certainly appreciated. However, it must be acknowledged that the Indonesian capital market is at a crossroads. On the one hand, it can become an engine of capital democratization and innovation funding for equitable growth. On the other hand, it can remain a blueprint for renewed oligarchic wealth. The recent increase in the Jakarta Composite Index (IHSG) reflects the latter.
We need the courage to carry out structural reforms in the capital market. Not to bring down conglomerates, but to create a level playing field. And, ultimately, the growth of the capital market will truly represent the rise of the national economy.
Not just from the rustling of the coffers of a handful of elites. A capital market supported only by a handful of conglomerates poses a latent danger that investors need to be aware of. Especially with a price-earnings ratio (PER) of thousands of times. Be careful.
