The Composite Stock Price Index (IHSG) of the Indonesia Stock Exchange (IDX) concluded trading on Thursday afternoon significantly lower, primarily weighed down by underperforming stocks in the basic materials and energy sectors.
The IHSG registered a substantial decline, shedding 223.56 points or 3.54 percent, to close at 6,094.94. Similarly, the LQ45 index, representing 45 leading stocks, also saw a notable drop of 14.28 points or 2.26 percent, settling at 616.40.
“The primary catalyst for the IHSG’s downturn stemmed from the government’s proposal to centralize commodity exports through state-owned export enterprises. This initiative is perceived by both domestic and foreign investors as potentially detrimental to the affected companies and their shareholders,” explained Lionel Priyadi, Fixed Income and Macro Strategist at PT Mega Capital Indonesia, when contacted in Jakarta on Thursday.
Market participants, both local and international, reacted strongly to the impending issuance of a Government Regulation (PP) concerning the Governance of Natural Resources Commodity Exports. This regulation notably includes provisions designating state-owned enterprises (SOEs) as the sole exporters for several strategic commodities.
Further amplifying investor concerns was the announcement of the formation of PT Danantara Sumberdaya Indonesia (DSI), a specialized SOE established specifically for managing exports within the natural resources sector.
PT DSI operates directly under the Danantara Investment Management Agency (BPI). Its core mandate is to enhance and strengthen the export governance of key strategic commodities such as crude palm oil (CPO), coal, and ferro alloy.
A significant driving force behind the establishment of this dedicated export SOE is the ongoing suspicion of under-invoicing practices in commodity exports. These alleged activities are estimated to have caused the state losses amounting to a staggering Rp15,400 trillion over a period of 34 years.
Throughout the trading day, the IHSG, which opened weaker, remained entrenched in negative territory during the entire first session. The market continued to languish in the red zone through the second session, ultimately closing with a sharp decline.
An analysis of the IDX-IC Sectoral Index revealed a broad-based correction across all eleven sectors. The basic materials sector experienced the most significant fall, dropping 6.96 percent. This was closely followed by the energy sector, which declined by 6.74 percent, and the non-primary consumer goods sector, down by 5.70 percent.
Despite the widespread losses, a few stocks managed to post significant gains, including SOTS, BOBA, ENAK, APLI, and KOBX. Conversely, the largest price depreciations were observed in stocks such as BUKK, IRSX, ENRG, POLU, and RAJA.
The overall trading activity recorded 2,145,783 transactions, with a total of 35.77 billion shares changing hands, amounting to a value of Rp18.49 trillion. In terms of individual stock performance, 88 stocks advanced, 663 stocks declined, and 69 stocks remained unchanged.
In the broader regional context this morning, Asian stock markets presented a mixed picture. The Nikkei index saw a robust increase of 1,853.59 points or 3.10 percent, reaching 61,658.00. In contrast, the Shanghai index dipped by 84.91 points or 2.04 percent to 4,007.28, and the Hang Seng index fell by 264.60 points or 1.03 percent to 25,386.52. Meanwhile, the Strait Times index managed a slight gain of 0.80 points or 0.02 percent, closing at 5,045.71.
Summary
The Indonesia Stock Exchange (IDX) saw a significant downturn, with the Composite Stock Price Index (IHSG) falling 3.54 percent to close at 6,094.94. This decline was primarily driven by the basic materials and energy sectors, which dropped by 6.96 percent and 6.74 percent, respectively. The market sell-off followed the government’s proposal to centralize natural resource exports under a new state-owned enterprise, PT Danantara Sumberdaya Indonesia, which aims to curb under-invoicing practices.
Market participants reacted negatively to the potential regulatory shift, leading to a broad-based correction across all eleven sectors on the IDX. While the majority of stocks declined, total trading reached 35.77 billion shares valued at Rp18.49 trillion. Regional Asian markets meanwhile showed mixed performance, reflecting varying investor sentiments amid shifting commodity export policies.