OJK states IHSG correction following MSCI rebalancing remains reasonable

Jakarta (ANTARA) - The Financial Services Authority (OJK) considers the decline in the Composite Stock Price Index (IHSG) following the announcement of the Morgan Stanley Capital International (MSCI) rebalancing results to still be within reasonable limits and not indicative of investor panic in the market.

OJK’s Executive Head of Capital Market Supervision, Financial Derivatives, and Carbon Exchange, Hasan Fawzi, stated during a press conference at the Indonesia Stock Exchange building in Jakarta on Wednesday that the frequency, volume, and value of share trading transactions today remained in normal condition.

“Earlier, the frequency and volume, as well as the transaction value (of securities), were also quite good. On average, there is no difference; it’s normal compared to previous days. This shows there is no panic selling or one-sided reaction in the form of selling shares without being balanced by buying strength,” said Hasan.

For information, the IHSG opened weaker on Wednesday morning by 94.96 points or around 1.38 percent to the level of 6,763.94. Based on data at 11:55 WIB, the IHSG was still corrected to the level of 6,738.31.

The reform makes the openness of share ownership structure more transparent, allowing global index providers, including MSCI, to recalculate share portions more accurately.

He acknowledged that the reform causes “short-term pain” in the form of share price pressure and index adjustments in the short term. However, the authority believes that this step will result in a more credible capital market in the long term.

“This certainly at least has short-term implications in the form of declines and price adjustment reactions for affected shares, so the term short-term pain that we have to face a level of decline in the short term,” he said.