Market Punished! IDX Turns Red Amidst Green Regional Bourses

Jakarta – The Composite Stock Price Index (JCI) collapsed to score a deep correction. Even though a number of Asian Stock Exchanges are green.

JCI in the first trading session today (6/2) closed by continuing its weakness to the level of 6,886.86 or slumped 1.96 percent from opening at the level of 7,024.22.

Based on RTI Business statistics on JCI trading today, 9.31 billion shares were traded, with a frequency of changing hands as many as 832 thousand times, and the total transaction value was recorded at Rp6.43 trillion.

Then, there were 403 stocks corrected, as many as 172 stocks strengthened and as many as 207 stocks remained unchanged.

In the midst of weakening JCI, Asian stock markets were green. The indices that strengthened include:

– Hang Seng rose 1.43 percent to 20,891

– Japan’s Nikkei gained 0.63 percent to 39,054

– Shanghai Composite increased 1.30 percent to 3,271.

JCI Negative Catalysts

Pilarmas Investindo Sekuritas, said that the negative catalysts that influenced the weakening of the JCI were dominated by domestic sentiment.

One of them is that the market is worried about Indonesia’s economic growth this year after responding to the release of 2024 GDP data and also related to Presidential Instruction Number 1 of 2025 concerning the efficiency of spending and implementation of the state budget and state budget which reached Rp306 trillion.

Previously, BPS noted that the realization of Indonesia’s economic growth during 2024 of 5.03 percent was lower than the achievements in 2023 and 2022 which amounted to 5.05 percent and 5.31 percent.

Then, the efficiency policy of the APBN and APBD is feared to have an impact on the national economy.

It is also feared that there will be work programs that are deleted and also budget cuts are not carried out selectively, potentially having a negative impact on public investment, job creation, and labor productivity, and reducing people’s purchasing power.

Meanwhile, another domestic sentiment that influenced JCI’s movement was the ratification of the revision of DPR RI Regulation Number 1 of 2020 concerning the House of Representatives’ Rules of Procedure in the DPR Plenary Meeting on February 4, 2025.

In the Code of Conduct, the legsislature can evaluate and dismiss government officials who are appointed through the DPR’s fit and proper test.

The officials that can be removed by the DPR include the Commissioners, Supervisory Board of the Corruption Eradication Commission (KPK), Judges of the Constitutional Court (MK), and Supreme Court (MA), Chief of Police and Commander of the Armed Forces.

Also, the Governor of Bank Indonesia (BI) and his deputies and of course the Chairman of the Financial Services Authority (OJK), the Commissioner of the Deposit Insurance Corporation (LPS). In fact, the Supreme Audit Agency (BPK). All institutions that have been subjected to fit & proper tests, including the OJK, LPS and BI supervisory bodies.

This mid-course removal has a negative impact, especially for the banking and financial sector. It could compromise the independence of BI, OJK and LPS. Investors and financial markets may doubt the credibility of these institutions, potentially triggering economic turmoil. Public trust could also be undermined. The public and businesses may question the integrity and professionalism of BI, OJK, and LPS. (*)