JCI Affordable After MSCI Removes 19 Stocks, OJK Urges Investors to Spot Opportunities

The Executive Head of Capital Market, Derivatives, and Carbon Exchange Supervision at the Financial Services Authority (OJK), Hasan Fawzi, explained that Indonesian stock prices are relatively cheap compared to exchanges in the region. The average Price to Earnings Ratio (PER) of Indonesian stocks is currently below the average for regional exchanges in Asia and Southeast Asia. PER is a financial ratio that compares the current stock price to the company’s net profit per share (Earnings Per Share/EPS). PER serves as a metric to assess whether a stock price is considered expensive (overvalued) or cheap (undervalued). “The JCI (Composite Stock Price Index) PER is now at a level of 16 times. This is far below the position at the all-time high in mid-January 2026, even below the average of other exchanges,” said Hasan, quoted from Kontan, Wednesday (13/5/2026). They can select the best stocks with future prospects. “Investors can take advantage of this momentum to enter the market and select the best stocks, which prospectively can continue to improve performance in the times ahead,” he explained. Based on Indonesia Stock Exchange data as of 12 May 2026, the Indonesian stock market PER reached 14.98 times. Meanwhile, the JCI Price to Book Value (PBV) ratio is at 1.90 times. However, investors are still scrutinising several issuers to determine if they will be profitable in the future or not. Although Indonesian stock valuations are recorded as cheap, in reality, 19 issuers in the JCI were removed from the global MSCI index. This prompted OJK Commissioner Chairman Friderica Widyasari Dewi to speak out. According to her, it is not only Indonesian issuers that were kicked out by MSCI; there are also from South Korea, China, and Japan. “This phenomenon is not only happening in Indonesia, but in almost all Asia-Pacific markets in this review,” she explained, quoted from Kompas.com, Wednesday (13/5/2026). “Changes in the MSCI index composition are part of the periodic review mechanism based on a number of objective parameters such as market capitalisation, free float, liquidity, and stock price dynamics,” she clarified. OJK is striving to strengthen Indonesian issuers that are ready to compete on the global stage. “OJK, together with all stakeholders, will continue to encourage strengthening market integrity, increasing free float and liquidity, expanding the investor base, and strengthening issuer governance so that the competitiveness of the Indonesian capital market becomes stronger and sustainable,” she said.