IHSG Snaps Winning Streak, Falls 1.11% to 5,920

The Jakarta Composite Index (IHSG) plunged more than 1% in trading on Tuesday (7/7/2026), halting a six-day winning streak amid market optimism over the prospects for the domestic stock market. Based on data from the Indonesia Stock Exchange (BEI) via IDX Mobile at the end of the first session, the IHSG stood at 5,920.15, down 66.34 points or 1.11% from the previous close of 5,986.50. Transaction value was recorded at Rp 5.23 trillion, with trading volume reaching 12.25 billion shares in 1.14 million transactions. A total of 197 stocks were in the green, while 447 stocks weakened and 142 stocks moved sideways. All trading sectors weakened, with the deepest corrections recorded in the raw materials, property and consumer sectors. The main laggards weighing on the IHSG’s performance today included BBRI, AMMN, SMRI, BREN and BRPT. Meanwhile, the stocks that cushioned the IHSG from a deeper decline were UNTR, JECX, CASA and AKRA. The negative sentiment in Indonesia’s financial market today came particularly from a warning by S&P Global Indices. The global index provider S&P Dow Jones Indices (S&P DJI) has again maintained the Indonesia Stock Exchange’s (BEI) classification as an Emerging Market. However, in its latest announcement, the agency also issued a severe threat if a number of problems in the domestic capital market remain unresolved. In the Country Classification - 2026/2027 Watchlist announcement released on 7 July 2026, S&P DJI placed Indonesia on the 2027 Watchlist. This means the country is now on the index provider’s monitoring list for a possible classification change at the upcoming 2027 annual review. Indonesia, currently classified as an Emerging Market, could potentially be reclassified to Special Measures or Frontier Market status. The core issue prompting S&P DJI to place Indonesia under watch is the matter of share ownership transparency and its impact on liquidity and the reliability of price formation in the market. Global institutional investors frequently question the lack of openness regarding share ownership structures on the Indonesian bourse, coupled with concerns over alleged coordinated trading patterns. These two issues make it difficult for foreign investors to gauge the true free float, while also casting doubt on whether market prices genuinely reflect fair mechanisms. On a positive note, S&P DJI assessed that Indonesian authorities—from the Financial Services Authority (OJK) to the BEI—have taken a number of regulatory steps to address these issues. However, S&P issued a firm caveat: if the problems are not fully resolved, Indonesia could be subject to Special Measures or even reclassified as a Frontier Market at the 2027 review. Conversely, if market transparency and liquidity improve, positive sentiment will flow and Indonesia’s Emerging Market status has a chance of being maintained. This warning from S&P DJI comes amid similar pressure from another global index provider, MSCI, which had earlier sharply highlighted concerns about the Indonesian bourse. In the MSCI 2026 Market Classification Review released at the end of June 2026, MSCI did maintain Indonesia as an Emerging Market. However, MSCI downgraded the rating for Indonesia’s Information Flow criterion—from a category with no issues to one requiring improvement. MSCI highlighted three structural problems almost identical to S&P’s concerns: opacity or lack of clarity in share ownership structures, indications of coordinated trading patterns disrupting price formation, and the limited availability of English-language information for foreign investors. The agency warned that if adequate progress is not visible by the November 2026 Index Review, MSCI will consider further steps—including the possibility of reclassifying Indonesia from an Emerging Market to a Frontier Market. This pressure is not without real consequences. Foreign fund flows continue to exit the Indonesian stock market, with net foreign sell at the Indonesia Stock Exchange reaching approximately US$3.6 billion in the year to date. A downgrade—whether by MSCI or S&P—risks triggering larger capital outflows, given that global passive funds track indices tied to specific market tiers.