New Phenomenon: In the Last Two Crises, IHSG Recovered Without Foreign Support

The movement of the Indonesian Composite Index (IHSG) has shown fluctuating dynamics that have captured the attention of market participants over the past week. After experiencing severe pressure and plunging to a bottom level of 5,317.91 during trading on Monday (8/6/2026), the index surprisingly recorded an aggressive reversal. The peak occurred on Tuesday (9/6/2026), when the IHSG posted an extraordinary surge of 7.57%. This figure made history as one of the highest daily increases since the Reform Era in the 2000s. The recovery momentum continued until the close of the first trading session on Friday (12/6/2026), with the IHSG climbing back to the level of 6,043.55. The rapid recovery from the 5,310 level to above the psychological threshold of 6,000 indicates a massive buying accumulation drive.

The significant surge that began on Tuesday (9/6/2026) could not be separated from the swift response of policymakers. On the same day, Deputy Speaker of the House of Representatives Sufmi Dasco Ahmad convened a meeting with directors of state-owned banks (Himbara), the Head of the State-Owned Enterprises Supervisory Board and Chief Operating Officer of Danantara Dony Oskaria, and Minister of State Secretary Prasetyo Hadi. This high-level meeting specifically discussed efforts to stabilise the turbulent stock market, including a strategic plan to conduct buybacks of state-owned bank shares whose valuations had become heavily discounted due to market panic. This responsive step demonstrated the government’s sense of crisis in safeguarding the resilience of the national capital market. This effort was in line with the preventive measures already taken by Bank Indonesia through its decision to raise the benchmark interest rate (BI Rate) to mitigate the impact of global sentiment volatility and secure domestic monetary stability.

The condition that makes this IHSG rebound phase an anomaly is the absence of foreign investor participation. While the index soared sharply from the bottom of 5,317 to the level of 6,043, foreign investors were actually observed distributing their portfolios massively. Based on trading data on Tuesday (9/6/2026), when the IHSG jumped 7.57%, foreign investors recorded a net outflow of Rp2.44 trillion. This selling pressure continued on Wednesday (10/6/2026) with fund outflows reaching Rp3.12 trillion, and eased slightly on Thursday (11/6/2026) to Rp252.49 billion. Cumulatively, since the beginning of the year, total foreign capital outflows from the Indonesian stock exchange have swelled to Rp67.63 trillion. This fact confirms that the tens of trillions of rupiah in shares offloaded by foreign investors after the IHSG hit its bottom level were entirely absorbed and accommodated by the liquidity strength of domestic retail and institutional investors.

The large-scale transfer of asset ownership from foreign to local investors at bottom valuation levels often serves as a fundamental confirmation of a bottoming price formation. Based on historical records, the dominance of foreign selling at the index’s lowest point is an anomaly that has occurred in several previous crisis cycles. For instance, after the IHSG hit a bottom on 8 April 2025, foreign investors still recorded a continued outflow of Rp20.19 trillion. A similar condition occurred after the bottom on 24 March 2020, with residual foreign selling pressure amounting to Rp1.61 trillion. This characteristic stands in stark contrast to the recovery cycles of 29 September 2015, 28 August 2013, and 28 October 2008, where the reversal was immediately marked by net buy inflows.

To confirm whether the recovery trend is solid, market participants often refer to the technical indicator of a bull market, which is a phase when the index has recorded an accumulated increase of 20% from its bottom level. In the crucial transition phase towards bull market confirmation, the movement of foreign funds often shows a change in accumulation patterns. Historical data shows that in the majority of cases, foreign fund flows begin to reverse into net buy positions ahead of a bull market confirmation. During the transitions in 2025, 2016, 2013, and 2008, foreign investors recorded net buy accumulations ranging from Rp1.39 trillion to Rp5.98 trillion. However, a real anomaly occurred during the recovery phase of 27 March 2020. At that time, the market still managed to break through the bull market confirmation even though foreign investors were still recording a net sell of Rp2.74 trillion in the preceding two weeks. Considering this empirical analysis, the resilience of domestic liquidity that is currently supporting the IHSG to soar to 6,043 provides an early signal of a solid bottoming phase. The absorption of tens of trillions of rupiah in share supply by local investors is a crucial foundation in this early phase. This capability is inseparable from the structural shift in the investor demographic on the stock exchange, which has triggered anomalies in the last two crises. As an illustration, the total composition of foreign investor transactions on the exchange in 2019 was at 32%, with the total number of Single Investor Identifications (SID) only reaching around 2.48 million. A massive change in investment behaviour began during the 2020 pandemic, in line with a 56% surge in the number of investors to 3.87 million. This sharp increase was dominated by a wave of domestic investors.