The Jakarta Composite Index (IHSG) rose sharply in the second session on Tuesday, reaching 5,249.75 by 15:30 WIB, up 253.14 points or 5.07 percent. The rebound followed steep losses in the previous two sessions, when the index fell 11.57 percent on Friday and a further 3.64 percent on Monday.
Trading volume reached 514.29 million lots, with a total value of Rp23.23 trillion. Gains were led by the infrastructure sector, which rose 8.8 percent, followed by financials at 6.4 percent and basic materials at 4.6 percent.
Market response to MSCI concerns
The sell-off began after MSCI opened the possibility of downgrading Indonesia’s equity market from Emerging Market to Standalone Market status. The index provider cited transparency of share ownership, alleged coordinated trading and a request for evidence that rules are enforced consistently.
On Monday, the Indonesia Stock Exchange (BEI) announced two measures in response. It will require disclosure of shareholdings above 1 percent, including information on shareholder affiliations. It will also exclude all High Shareholding Concentration (HSC) listed shares from IHSG calculation, with the effective date still to be announced.
Officials stress market continuity
BEI president director Jeffrey Hendrik said HSC shares make up 18 percent of the index but are not delisted and remain tradable. He said they could re-enter the IHSG calculation after leaving the HSC list, and that no additional sanctions would apply to issuers on the list.
Dony Oskaria, head of BP BUMN and chief operating officer of Danantara, said the fund was ready to add ownership in fundamentally strong state-owned enterprise shares. He described the index weakness as normal market dynamics.
Related: Jakarta stocks slump 3.64% as MSCI weighs Indonesia downgrade · Jakarta index falls 5% on MSCI market-status review
