Foreign Media Highlights Indonesia's Pump-and-Dump Stocks, Reveals Shocking Facts
Jakarta, CNBC Indonesia - Foreign media has highlighted “pump-and-dump” stocks in Indonesia’s capital market. The Financial Times has drawn attention to pump-and-dump stocks that are more expensive than Nvidia shares, owned by one of the world’s richest individuals.
Several stocks in the spotlight include PT Dian Swastatika Sentosa Tbk (DSAA), Indonesia’s third-largest company, primarily focused on coal production. However, its valuation reflects an extremely high multiple surpassing Silicon Valley startups.
DSAA shares are valued at 135 times the company’s earnings, which the Financial Times describes as a valuation that even the fastest-growing companies would struggle to justify. Nvidia, whose AI chips have made it a stock market favourite and propelled its market capitalisation to US$4.6 trillion, has a price-to-earnings (P/E) ratio of 38.
Dian Swastatika Sentosa is one of eight of Indonesia’s top 25 listed companies with a P/E ratio over 100, according to FT analysis. Many of them are linked to conglomerates controlled by Indonesia’s richest tycoons.
“It is very clear on certain valuation metrics that it is far from reality,” Gary Tan, portfolio manager for emerging markets at Allspring Global Investments, told the Financial Times, quoted on Friday (17/4/2026).
The extremely high valuations reflect the low free float of these companies, meaning most shares are held by controlling shareholders with only a small portion available for investors to buy and sell.
This illustrates issues raised by global index provider MSCI in January, when they expressed doubts about Indonesia’s investment viability and warned of a possible downgrade from ‘emerging market’ to ‘frontier market’ status.
MSCI cited a lack of transparency in share ownership structures, concerns about potential coordinated trading behaviour, and limited free float. While high valuations and low free float do not always indicate rule-breaking, Indonesian regulators, investors, and analysts suspect that in some cases, insiders hold shares through nominees and trade among themselves, creating artificial liquidity and manipulating share prices.
This practice often results in wild share price fluctuations and has earned the nickname ‘pump-and-dump’ stocks.
“These conglomerate stocks make Nvidia look very cheap,” said Ricky Ho, who manages the US$750 million Four Capital fund based in Singapore.
Some US stocks like Palantir and Tesla have high valuations, he said, but they reflect “real liquidity” based on fair trading.
Among the stocks worrying investors is PT Barito Renewables Tbk (BREN), Indonesia’s second-largest listed company on the Indonesia Stock Exchange (BEI), with a market capitalisation of US$45.2 billion and a P/E ratio of 358. BREN is controlled by Prajogo Pangestu, Indonesia’s richest person, and has a free float of 12.6%. Its shares, one of the most volatile in the market, have risen 679% since debuting in 2023.
Barito Renewables stated that its share price movements are “the result of market mechanisms”. The company affirmed its commitment to complying with regulations and “upholding good corporate governance and market integrity”.
Meanwhile, Dian Swastatika Sentosa, controlled by the Widjaja family as part of the Sinar Mas conglomerate, has a free float of 20%.
DSAA derives about 90% of its revenue from coal mining, an industry where P/E ratios have mostly declined. The company has interests in high-growth sectors such as renewables, data centres, chemicals, and telecommunications, but these remain a small part of its business.
Moratel, a telecommunications company also part of Sinar Mas, has a P/E ratio of 247 and a free float of 33.8%. At the end of 2025 - before the MSCI warning triggered a market downturn - its P/E ratio was at 1,021.
As part of efforts to improve transparency, the BEI recently highlighted several companies with high shareholder concentration, including some owned by tycoons. The exchange stated that a small number of shareholders control 97.3% of Barito Renewables shares and 95.76% of DSAA shares.
The government has announced measures to address the issues raised by MSCI. It has doubled the minimum free-float requirement to 15%, though regulators have given companies three years to comply and tightened rules on shareholder disclosure.
Authorities have imposed sanctions on securities firms for alleged capital market rule violations, while Indonesia’s Financial Services Authority (OJK) stated it is investigating “various potential market violations”. Potential violations could include “market manipulation and other trading practices aimed at creating a false or misleading appearance of trading activity,” the authority said.
“The scope of the investigation goes beyond the general understanding of pump-and-dump stocks and focuses on identifying behaviour that may violate capital market rules or undermine the integrity and fairness of price formation in the market,” OJK told FT.
OJK added that no specific investigations targeting particular conglomerates or their shareholders have been publicly announced at this time.
Global fund managers say they generally avoid tycoon-owned stocks with limited publicly circulating shares, but such options are unavailable to investors buying indices.
Tan from