JCI Drops to 5,941.07 as Market Questions Indonesia's Credibility

The Indonesia Composite Index (JCI) on the Indonesia Stock Exchange closed lower on Wednesday afternoon. Investors are closely scrutinising Indonesia’s governance and policy credibility.

The JCI fell by 254.36 points, or 4.11 per cent, to the 5,941.07 level. Meanwhile, the LQ45 index, comprising 45 blue-chip stocks, dropped by 30.28 points, or 4.89 per cent, to 588.99.

After opening stronger, the JCI moved into negative territory until the close of the first trading session. In the second session, the index remained in the red until the close of trading.

According to the IDX-IC Sectoral Index, all eleven sectors weakened, led by the basic materials sector, which fell by 9.31 per cent, followed by the energy and infrastructure sectors, which dropped by 5.23 per cent and 5.01 per cent, respectively.

The stocks that saw the largest gains were WEHA, MMIX, OMRE, MSIN, and CASA, while the largest decliners were TPIA, APIC, ARKO, GMTD, and KJEN.

Trading frequency recorded 2,767,373 transactions, with a total of 40.17 billion shares traded, valued at Rp25.25 trillion. There were 69 gaining stocks, 692 declining stocks, and 54 unchanged stocks.

In the regional Asian markets, the Nikkei rose 1,742.76 points, or 2.61 per cent, to 68,477.00; the Shanghai index rose 8.87 points, or 0.22 per cent, to 4,083.97; the Hang Seng index fell 405.11 points, or 1.56 per cent, to 26,038.32; and the Straits Times index rose 37.29 points, or 0.73 per cent, to 5,134.98.

Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas, stated that the JCI plummeted to levels near 5,882, returning to its lowest level of 2025. Meanwhile, the Rupiah breached the Rp17,950 per US Dollar mark, and foreign investors recorded a net sell of Rp66.20 trillion year-to-date.

“This condition feels increasingly stark when several global exchanges are actually still able to record new highs,” said Liza in a Kiwoom Sekuritas analysis received by Tempo on Wednesday, 3 June 2026.

According to Liza, the market is no longer questioning Indonesia’s ability to grow, but rather its credibility. There are at least five main concerns dominating investor sentiment: governance and credibility following negative outlooks from Moody’s and Fitch; Rupiah pressure approaching the 18,000 level per US Dollar; the shrinking middle class, which has long been the engine of domestic consumption; and ongoing foreign outflows.

“Lastly, what has been most viral recently is the increasing risk regarding leadership and policy communication in the eyes of global investors,” Liza added.

Regarding whether Indonesia is entering a phase of structural de-rating, Liza noted, “It is possible, but not certain.” Currently, the market appears to be treating Indonesia differently from other emerging markets. The EIDO (Indonesia ETF) has recorded a return of -28.6 per cent since the start of 2025, while emerging markets have risen by +64.6 per cent, Vietnam by +63.2 per cent, Taiwan by +107.2 per cent, and the United States by +30.9 per cent.

“In other words, global investors are not leaving emerging markets; they are specifically reducing their exposure to Indonesia,” Liza stated.

She added that investor focus is now shifting to the two most crucial weeks of the year. On 19 June, the MSCI Global Market Accessibility Review and the FTSE Russell Global Equity Index Series Review will take place, followed by the FTSE Rebalancing effective 22 June, and the MSCI Annual Market Classification Review on 24 June 2026. Following Moody’s and Fitch, FTSE and MSCI could serve as the next tests for the credibility of the Indonesian capital market.

Liza noted that almost all the bad news investors could imagine has emerged in the last six months: the weakening Rupiah, increased foreign outflows, negative outlooks from Moody’s and Fitch, rising concerns regarding S&P, and the upcoming MSCI and FTSE reviews of Indonesia. However, Indonesia maintains its investment grade status, S&P maintains a stable outlook, MSCI has not changed Indonesia’s classification, and FTSE has not placed Indonesia on a downgrade watch list.

This means that much of the risk currently feared by the market is still a possibility rather than an established fact. “The problem is, Indonesia’s policies, which often appear suddenly and mysteriously, frequently provide another blow to the market. While the market is still digesting the initial implementation of DSI, DHE SDA, and there are new regulations on MSME taxes, and God knows what in the near future,” Liza said.

She concluded that the market is no longer looking for reasons to sell; it is looking for reasons to stop selling. In the short term, FTSE and MSCI will likely be the most important upcoming tests. The question for investors is no longer “why is the JCI falling?”, but whether the market is assessing Indonesia’s risk objectively or has begun to punish Indonesia more harshly than necessary.