IHSG at Lowest Level Since December 1, 2020: A Look at the Past Four 'Crises'
Jakarta, CNBC Indonesia - The Jakarta Composite Index (IHSG) experienced a significant drop in early trading today. The benchmark index fell by 5% and reached a low of 5,644.23 at 09.57 WIB.
This represents a sharp decline compared to the previous day’s closing of 5,941.07.
The continued decline in the index confirms that the IHSG has fallen back to its lowest level since December 1, 2020, reflecting an aggregate market valuation equivalent to the uncertainty of the COVID-19 pandemic era.
Danantara Sentiment and Rupiah Depreciation
The continued correction in the benchmark index is still triggered by the accumulation of macroeconomic and institutional sentiment that has not yet subsided. The impact of the downward revision of the outlook from Danantara Investment Management the previous day continues to put pressure on the risk preferences of institutional investors.
This pressure in the equity market is happening in tandem with the depreciation of the Rupiah exchange rate, which has now broken through a new psychological level, at Rp18,000 per US dollar.
This significant weakening of the currency raises rational concerns from market participants about the potential increase in operational burdens for issuers with large foreign currency liabilities.
Anticipation of S&P and MSCI Reports
The current vulnerability of the stock exchange is at a crucial phase, given that the publication of the S&P Global Ratings rating - which has reportedly triggered selling - has not yet been officially released. In addition, market volatility is also driven by investor anticipation ahead of two important MSCI agendas.
The global index provider is scheduled to publish the Market Accessibility Review on June 19, followed by the Classification Review announcement on June 24.
The risks associated with potential adjustments to the evaluation and classification from MSCI logically encourage investors, especially foreign investors, to accelerate mitigation steps by reducing exposure to risky assets in the Indonesian capital market before the announcement is made.
Volatile Period Since the 2020 Pandemic
Since the Covid-19 pandemic, the IHSG has experienced at least four major periods of volatility, namely the pandemic in 2020-2021, the outbreak of the Russia-Ukraine war (February 2022), the start of the trade war (April 2025), and this year.
CNBC Indonesia notes the decline in these crisis periods from the closing before the period to the lowest point. The distance between the period before the volatility and the worst low point is this year, at 3,000.
Disclaimer: This article is a journalistic product in the form of CNBC Indonesia Research’s views. This analysis is not intended to encourage readers to buy, hold, or sell related investment products or sectors. The decision is entirely up to the reader, so we are not responsible for any losses or profits arising from that decision.
CNBC INDONESIA RESEARCH