OJK: IHSG at attractive level, supported by low valuation and issuer performance
Jakarta - The Financial Services Authority (OJK) views the Indonesia Stock Exchange (IDX) Composite index (IHSG) as being at an attractive level at present because it is supported by lower valuations compared to historical periods and regional markets, as well as improving issuer performance.
Chairman of the OJK Board of Commissioners Friderica Widyasari Dewi, during a working meeting with Commission XI in Jakarta on Wednesday, stated that the movement of the IHSG is also increasingly converging with global benchmark indices published by MSCI and FTSE Russell.
According to her, this condition indicates that the market is beginning to respond positively to various reform measures undertaken by regulators in the capital market, particularly in addressing key issues of concern to stakeholders, including global index providers.
In addition, issuer performance in the first quarter of 2026 showed a positive trend. The improvement in corporate revenues and profitability is deemed to provide fundamental support for the prospects of the domestic stock market going forward.
Friderica also conveyed that the structure of the Indonesian capital market continues to demonstrate strong resilience because it is supported by a domestic investor base, particularly retail investors which continue to grow.
The number of capital market investors increased from 12.17 million in 2023 to 26.49 million as of April 2026. Of this amount, individual investors dominate with a total of 26.43 million investors, far larger than corporate or mutual fund investors.
Nevertheless, Friderica cautioned that there is still ample room for market deepening. This is given that the number of active daily investors has only reached around 448,000 investors, equivalent to 1.69 percent of the total investors as of April 2026.
Moving forward, she said, OJK will continue to strengthen investor literacy and protection, maintain market integrity, and deepen capital market product development.
This step is taken so that the growth in the number of investors is not only quantitative but also forms the foundation for a healthier, more inclusive, and sustainable national capital market.
In maintaining the stability of the financial services sector, Friderica said OJK is continuously strengthening forward-looking supervision through the regular implementation of stress tests and close monitoring of liquidity risk, capital, asset quality, and risk concentration.
“The OJK also continuously assesses the resilience of the financial services sector under various stress scenarios,” Friderica said.
Amid exchange rate pressures, Friderica also noted that banks’ foreign exchange intermediation indicators remain at a healthy level. This is reflected in the foreign exchange loan to deposit ratio which remains adequate.
In addition, the aggregate banking industry still records a net long position, while the net open position (NOP) remains below the applicable regulatory limit, indicating that banks’ exchange rate risk exposure remains under control.
Aside from maintaining financial services sector stability amid global uncertainty, OJK also continues to encourage the acceleration of national economic growth through various strategic and priority programmes.
These programmes are directed towards strengthening the intermediation function, expanding access to financing, and increasing the resilience of the national financial system.
The priorities include increasing financial services sector financing, strengthening the MSME ecosystem and financing, deepening financial markets as a source of development financing, and developing a green economy through the implementation of carbon economic value and sustainable finance.
At the same time, OJK is also promoting secure digital finance development, strengthening the Islamic financial services sector, increasing financial literacy and inclusion, and strengthening consumer and public protection.
Friderica emphasised that OJK will continue to consistently enforce the law to strengthen the integrity of the financial services sector.
Through these various priority agendas, OJK aims to ensure the financial services sector is not only stable and resilient but also increasingly productive and contributive as a vital foundation for inclusive, sustainable, and competitive national economic growth.