Index Rebalancing Shakes Up Big Cap Stocks and IHSG, Retail Investors Must Be Clever in Stock Selection
JAKARTA, KOMPAS.com - The impact of changes to the index methodology in the Indonesian stock market is beginning to be felt. For retail investors, this phase is not merely ordinary volatility, but a crucial moment for determining the future direction of their portfolios.
Market observer and Founder of Republik Investor, Hendra Wardana, assesses that the revised criteria for indices at the Indonesia Stock Exchange (BEI) in IDX30, LQ45, and IDX80 have fundamentally shifted the investment landscape.
Previously, stock selection was primarily based on market capitalisation; now, the emphasis has shifted to liquidity quality, free float levels, and ownership distribution through High Shareholding Concentration (HSC) rules.
“The changes to the BEI index criteria for IDX30, LQ45, and IDX80, which now include minimum free float requirements, number of trading days, and HSC rules, essentially shift the selection focus from mere market capitalisation to liquidity quality and the openness of stocks to the public,” Hendra told Kompas.com on Friday (24/4/2026).
According to him, this means that for investors, strategies can no longer rely solely on big caps but must be more selective in assessing real liquidity and ownership structures. The phenomenon of price drops in HSC-category stocks, such as PT Dian Swastatika Sentosa Tbk (DSSA) which plunged 9.78 percent and PT Barito Renewables Energy Tbk (BREN) down 4.26 percent, illustrates market concerns over potential exclusion from the indices.
Meanwhile, pressure on major banking stocks in Friday’s first trading session, such as PT Bank Mandiri (Persero) Tbk (BMRI) which corrected by 2.16 percent, PT Bank Central Asia Tbk (BBCA) down 5.45 percent, PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) down 2.53 percent, and PT Bank Negara Indonesia (Persero) Tbk (BBNI) down 3.36 percent, indicates high sensitivity to the index methodology changes.
“Considering that these stocks have long been the backbone of the indices and institutional investors’ portfolios,” he explained.
However, in the short term, increased volatility risks cannot be avoided, particularly due to potential forced rebalancing by index mutual funds and ETFs that must adjust their portfolios to the new composition.
If flagship stocks are removed from the indices, mechanical selling pressure (technical selling) will occur, not due to deteriorating fundamentals, but because of the rules. This can create temporary price dislocations, even in quality stocks.
“This level is crucial because if breached with high volume, the risk of further weakening will open up, especially amid the dominance of passive fund flows and limited foreign inflows. Conversely, if it holds, that area could become a healthy consolidation point before the index seeks a new direction,” he concluded.