JCI Remains a Bloodbath, Session 1 Falls 3.48%!

Pressure on the Jakarta Composite Index (IHSG) has not yet subsided. The first trading session closed down 206.81 points, or -3.48%, at 5,734.26. As is known, in yesterday’s trading the IHSG closed plummeting 4.11% with the majority of issuers in the red zone. Since this morning, the IHSG immediately opened trading in the red zone. It did not take long for the IHSG to free fall, leaving the 5,800 level, or falling more than 2% from yesterday’s closing price. The majority of issuers are still experiencing selling pressure. A total of 716 were in the red zone and only 68 managed to move upwards. Meanwhile, 175 issuers were stagnant. Today’s transaction value was fairly busy, amounting to Rp 12.72 trillion with volume reaching Rp 20.87 billion in 1.36 million transactions. Market capitalisation was recorded as evaporating by Rp 364 trillion during the first session. Citing Refinitiv, the property and raw materials sectors experienced the deepest correction, namely -6.44% and 5.7%. The smallest correction was experienced by technology, which was recorded as falling 1.96%. All major bank shares were the main drag on the IHSG this afternoon. Bank Central Asia (BBCA) and Bank Rakyat Indonesia (BBRI) occupied the top ranks of top laggards, with contributions of -18.74 points and -17.25 points. In fifth place was Bank Mandiri (BMRI) with a weight of -7.82 points. Among the major bank shares, Prajogo Pangestu’s issuer Barito Pacific (BRPT) was wedged in, with a contribution of -10.13 points, and Astra (ASII) with -7.98 points. This continuous index decline confirms that the IHSG has plunged further, touching its lowest level since 1 December 2020, reflecting an aggregate market valuation equivalent to the conditions of uncertainty during the Covid-19 pandemic era. The continued correction in the benchmark index is still triggered by an accumulation of macroeconomic and institutional sentiment that has not subsided. The effect of the outlook downgrade for Danantara Investment Management on the previous day continues to put pressure on the risk preference of institutional investors. This pressure in the equity market is moving in tandem with the depreciation of the Rupiah exchange rate, which has now breached a new psychological level, at Rp18,000 per US Dollar. This significant currency weakening raises rational concerns among market participants regarding a potential surge in the operational expenses of issuers with large portions of foreign currency obligations. The stock market’s level of vulnerability is currently in a crucial phase, considering the rating publication from S&P Global Ratings—which rumours say has triggered the sell-off—has not yet been officially released. In addition, market volatility is also driven by investors’ anticipatory stance ahead of two important agendas from MSCI. The global index provider is scheduled to publish its Market Accessibility Review on 19 June, which will then be followed by the Classification Review announcement on 24 June. The risk accompanying the potential adjustment of MSCI’s evaluation and classification logically drives investors, especially foreign investors, to accelerate mitigation steps by reducing exposure to risky assets in the Indonesian capital market before the announcements are made.