The Jakarta Composite Index (IHSG) fell more than 5 percent in morning trading on Monday, sliding to the 4,900 level. The index is now below its 2016 close of 5,296. The sell-off followed MSCI’s announcement that it would consult on downgrading Indonesia’s stock market status to standalone market.
By 9:35 WIB, trading volume had reached 11.6 billion shares, with a transaction value of 6.42 trillion rupiah across 464 thousand transactions. Market capitalisation stood at 8,726 trillion rupiah at that time.
Banks lead the decline
Large banks were among the hardest hit. Shares of PT Bank Central Asia Tbk (BBCA) fell 6.86 percent, while PT Bank Rakyat Indonesia Tbk (BBRI) dropped 5.68 percent. PT Bank Mandiri Tbk (BMRI) declined 3.54 percent and PT Bank Negara Indonesia Tbk (BBNI) fell 3.37 percent.
Market capitalisation on the Indonesia Stock Exchange (BEI) had stood at 16,014 trillion rupiah in January. The index’s slide since then has wiped out 7,288 trillion rupiah, a fall of 45.51 percent.
Analyst sees further downside
Ivan Rosanova, an analyst at BinaArtha Sekuritas, said the index could keep weakening to 5,020 and potentially to 4,808. He said the MACD indicator showed bearish momentum. He also noted that the index had confirmed wave v after closing below the fractal level of 5,317 on Friday, 16 October.
Related: MSCI review of Indonesia status triggers 11.57% IHSG rout · OJK pledges reforms as MSCI review weighs on Jakarta stocks
Source: MSCI
