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View all search resultsStocks plunge again as doubts persist over reform plan
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Stocks are shown on a digital screen on Jan. 29, 2026 in the Indonesia Stock Exchange's (IDX) main hall in South Jakarta. (TJP/Deni Ghifari)
I
ndonesian shares plunged again on Monday, showing that a leadership shakeup at stock market institutions and government assurances about planned reforms have not allayed investor concerns.
BRI Danareksa Sekuritas analyst Abida Massi Armand said the resignations at the Indonesia Stock Exchange (IDX) and the Financial Services Authority (OJK) impacted mainly “short-term psychological sentiment.”
The main cause of the rout was the potential relegation of Indonesian stocks by global stock market index compiler Morgan Stanley Capital International (MSCI), he added.
“Reforms based on the MSCI’s evaluation could increase the quality of Indonesia’s capital market, but in the short-term, it could trigger volatility during the policy transition period and as market actors adjust to it,” Abida told The Jakarta Post on Monday.
Despite the government scrambling to reappoint key officials at the two institutions over the weekend, the benchmark IDX Composite index dropped by around 5 percent to below 7,900 points within the first 30 minutes of trading on Monday, before moving mostly sideways for the rest of the day and closing at 7,922, down 4.9 percent.
Less than two weeks ago, the IDX Composite index had made headlines for hitting record highs above 9,000 points, but sentiment nosedived when MSCI announced its decision to suspend tracking of Indonesian assets due to transparency issues on Jan. 27.
Indonesian authorities held a meeting with MSCI representatives on Monday, after which Hasan Fawzi, an acting official at the OJK, promised “regular updates to the public about the progress”.
