{
    "success": true,
    "data": {
        "id": 1786812,
        "msgid": "global-investors-call-for-sell-indonesia-as-trust-evaporates-1780656622",
        "date": "2026-06-05 15:12:32",
        "title": "Global Investors Call for 'Sell Indonesia' as Trust Evaporates",
        "author": " ",
        "source": "GALERT",
        "tags": "",
        "topic": "Economy",
        "summary": "Global investors are increasingly losing confidence in Indonesia, prompting a 'Sell Indonesia' campaign as the benchmark stock index suffers the world's fastest decline and the rupiah hits an all-time low. Concerns centre on political uncertainty, fiscal credibility, and opaque policy implementation under President Prabowo Subianto's administration. Market participants warn that restoring fiscal predictability and central bank independence is crucial to attracting back foreign capital.",
        "content": "<p>The call to sell Indonesian stocks is growing louder among global\ninvestors as confidence in the country continues to erode. This is\nreflected in the nation\u2019s main stock index recording the swiftest\ndecline globally, whilst the rupiah touched its lowest level in history.\nJust five months after reaching a record high, Indonesia\u2019s benchmark\nstock index has plunged 37%, making it the worst performer this year\namong more than 90 global indices tracked by Bloomberg. The rupiah has\nweakened over 7%, whilst foreign investors have pulled billions of\ndollars from Indonesian government bonds. \u201cThe main trend in Asia right\nnow is \u2018Sell Indonesia\u2019,\u201d said George Boubouras, head of research at\nhedge fund K2 Asset Management, which manages about US$4.3 billion.\nAfter decades of investing in Indonesia, he exited the market completely\nin 2024. Since taking office in October 2024, Prabowo has targeted 8%\nannual growth, expanded a free school meals programme, increased the\nstate\u2019s role in the economy, and channelled funds into Danantara,\nIndonesia\u2019s sovereign wealth fund. His latest move to take direct\ncontrol over key commodity exports to curb tax avoidance triggered a\nsell-off in exporter shares. For many investors, the resignation of\nformer Finance Minister Sri Mulyani Indrawati last year was a turning\npoint. She was known as a guarantor of fiscal discipline who convinced\nmarkets that Indonesia would maintain conservative budget management,\nwhich previously helped secure an investment-grade credit rating and\nattract long-term foreign capital. Now, investors are beginning to doubt\nthat commitment. \u201cDomestic political uncertainty is a typical risk in\nemerging markets, and global investors tend to wait until predictability\nreturns,\u201d said Yuxuan Tang, head of Asia rates and foreign exchange\nstrategy at JPMorgan Private Bank in Hong Kong. The rupiah has become\nthe clearest expression of market anxiety, falling around 14% since\nPrabowo took office and becoming Asia\u2019s weakest currency this year.\nMiddle East conflicts and high energy prices have worsened Indonesia\u2019s\nexternal position, given the country remains a net oil importer.\nPressure has also spread to the bond market. Foreign investors have\nreduced their holdings of Indonesian government bonds by Rp86 trillion\n(US$4.8 billion), around 9%, since last August. Those bonds have lost\nmore than 8% for dollar-based investors this year, compared with a 1.6%\ngain for emerging-market bonds overall, despite several interventions by\nBank Indonesia. Another concern arises from Bank Indonesia\u2019s continually\nrising ownership of government bonds, now around 27%, a high figure for\na developing economy. Many investors question whether this move\nincreasingly resembles quantitative easing. \u201cThe focus is on the\nweakening rupiah outlook, as well as concerns about macro imbalances and\nfiscal policy credibility,\u201d said Gary Tan, portfolio manager at\nAllspring Global Investments. The decline has also battered the stock\nmarket. The Jakarta Composite Index (IHSG) has plunged more than 30%\nthis year, amid fears of a sovereign credit rating downgrade. MSCI even\nwarned of the possibility of downgrading Indonesia\u2019s status from an\nemerging market to a frontier market, triggering one of the worst stock\nsell-offs in decades. Investors are questioning the implementation of\ngovernment policies, from commodity export controls and state spending\nprogrammes to anti-corruption efforts. The concern is not just about the\npolicy concepts, but the lack of clarity in their execution. \u201cIf I\ncannot trust the plumbing, I do not want to be the last one out,\u201d said\nAna Isabel Gonzalez Encinas, Chief Investment Officer at Farringdon\nAsset Management in Singapore. What the market needs now is fiscal\ncertainty, central bank independence, transparency regarding Danantara\u2019s\nrole, and clarity on the direction of economic policy. Indonesia\u2019s\nability to restore predictability will determine how quickly foreign\ncapital returns. \u201cThe government needs partners, bondholders. Until that\nis achieved, the \u2018sell Indonesia\u2019 strategy remains in place,\u201d concluded\nBoubouras.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/global-investors-call-for-sell-indonesia-as-trust-evaporates-1780656622",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}