IDX Drops, Purbaya: Do Not Be Afraid, Buy the Dip Now
JAKARTA — Indonesian Finance Minister Purbaya Yudhi Sadewa has requested that capital market investors do not panic in response to the weakening of the Indonesia Stock Exchange (IDX) during Monday morning’s trading session. Purbaya suggested that investors instead take advantage of this corrective momentum to purchase shares at low prices, a strategy known as ‘buying the dip’.
“So, friends, there is no need to worry; as for stock market investors, I say do not be afraid, buy the dip now,” Purbaya stated at Halim Perdanakusuma Air Force Base, East Jakarta, on Monday. He expressed optimism that the current stock market decline is merely temporary and driven by short-term sentiments.
Purbaya assessed that Indonesia’s current economic condition remains sufficiently strong and cannot be compared to the 1997-1998 crisis. According to him, market anxiety stems from the perception that the weakening Rupiah resembles the 1998 monetary crisis. “There are many sentiments; if the Rupiah weakens, it feels as though we are heading towards a repeat of ’97-’98. It is different; ’97-’98 involved failed policies and socio-political instability occurred after a year of recession,” he explained.
He emphasised that Indonesia is not currently experiencing a recession and national economic growth is continuing. In addition to advising investors to remain calm, the government has begun intervening in the bond market to maintain financial market stability and the Rupiah exchange rate. “We will also enter the bond market starting today. We entered slightly last week, but from today, we will enter more significantly so that the bond market remains controlled,” he said.
Purbaya explained that this measure is intended to prevent foreign investors holding government bonds from exiting the market due to fears of capital losses resulting from falling bond prices.
High selling pressure caused the IDX to drop by 252.971 points, or 3.76 per cent, to the level of 6,470.348, after briefly touching a low of 6,441. Despite the sharp correction, the decline has not yet reached the trading halt threshold set by the Indonesia Stock Exchange (IDX). The decline was also observed in several other leading indices. The LQ45 index fell by 20.109 points, or 3.06 per cent, to 637.770. Meanwhile, the Jakarta Islamic Index (JII) weakened by 4.21 per cent to 419.45, and the KOMPAS100 index dropped by 3.88 per cent to 858.58. Overall, the majority of stocks moved into the red zone.