IHSG Rebound Reflects Technical Recovery After Sharp Correction
Yusuf Rendy Manilet, a researcher at the Centre of Reform on Economics (CoRE) Indonesia, has highlighted the recent strengthening of the Indonesia Composite Index (IHSG). Despite recording a significant rebound, Yusuf assesses that the increase primarily reflects a technical recovery following a previous sharp correction.
“The rebound has indeed been very strong following discussions regarding State-Owned Enterprise (SOE) share buybacks and several market stabilisation policies. However, it must be noted that this rise follows a very deep correction. In other words, most of the strengthening can still be read as a technical recovery from oversold conditions, rather than the start of a long-term upward trend fully supported by fundamentals,” he stated on Wednesday (17/6).
Furthermore, he believes that share buyback policies have limitations in supporting the capital market in the long term. According to him, the indicator that requires close monitoring is actually foreign capital flows, which currently still show a tendency to exit the domestic market.
“Until mid-2026, foreign investors are still recording significant net sells, so the strengthening of the IHSG is largely supported by domestic investors and liquidity rotation into large-cap stocks. This indicates that global investor confidence has not yet fully recovered,” Yusuf explained.
Nevertheless, the easing of geopolitical tensions in the Middle East continues to provide a positive impact on the Indonesian economy. The hope for a peace agreement between the US and Iran has reduced market concerns regarding global energy supply disruptions, thereby encouraging a correction in global oil prices.
“For Indonesia, which remains a clean energy importer, lower oil prices help reduce inflationary pressures and improve the external balance prospects. However, this factor remains outside of domestic control and could change at any time should the geopolitical situation deteriorate again,” he concluded.
The IHSG opened stronger by 1.07% to the level of 6,321.96 on Wednesday (17/6). The market is adopting a ‘wait and see’ approach, awaiting Bank Indonesia’s interest rate decisions and hawkish sentiment from the US Federal Reserve.