Kuya Food Express – JAKARTA – The successful completion of all Indonesian capital market integrity reform proposals marks more than just a policy achievement; it signifies a structural turning point. For the first time, Indonesia is not merely reacting to global standards but is proactively reshaping the very foundations of its market’s transparency, investability, and credibility.
According to the Executive Head of Capital Market, Derivative, and Carbon Exchange Supervision at OJK, these comprehensive reforms include the disclosure of share ownership data above 1%, the strengthening of investor classifications into 39 categories, and the adjustment of free float requirements to 15%. Equally vital are the implementation of the High Shareholding Concentration (HSC) as an early warning mechanism and enhanced access to beneficial owner information down to a minimum 10% shareholder level, solidifying the market’s new direction towards greater transparency, accountability, and measurability.
Previously, the market faced considerable pressure. Throughout March 2026, the IHSG experienced corrections of 14.42% monthly and 18.49% annually. This pressure stemmed from a combination of global dynamics, domestic factors, and assessments from global index providers, which triggered a repositioning of global investor portfolios. This trend was evident in the fund flows, recording a foreign net sell of Rp23.34 trillion.
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At first glance, these conditions might be perceived as a signal of weakness. However, a deeper examination reveals that the market’s foundations are actually demonstrating relatively strong resilience. Liquidity remains robust, with an average daily transaction value (RNTH) of Rp20.66 trillion, while the bid-ask spread stays within a stable range. The domestic investor base has also continued to strengthen, reaching 24.74 million, an annual growth of 21.51%.
Within the investment management sector, performance shows a positive trend. Assets Under Management (AUM) have reached Rp1,084.10 trillion, and mutual fund net subscriptions remain strong at Rp29.12 trillion. Furthermore, even amidst pressure, the intermediation function continues effectively, with corporate fundraising reaching Rp51.96 trillion and a solid pipeline of future activity. In essence, the current situation appears to be more of an adjustment phase rather than a fundamental weakening of the market.
A HISTORY OF RESILIENCE
It is insightful to revisit the historical patterns of the Indonesian capital market. History demonstrates that the IHSG is no stranger to pressure; in fact, it has repeatedly navigated episodes of crisis with a characteristically rapid recovery.
During the 1997 Asian crisis, the IHSG corrected by approximately 31.96% but recovered within about 3 months. In 1998, it fell by around 18.69%, recovering even faster, in just 1 month. The dot-com crash pressure in 2000 saw a 21.64% decline, with recovery in 9 months, while the global shock from the 9/11 events in 2001, which caused a 23.76% drop, stabilized within 5 months. Even during the 2008 global financial crisis, the IHSG fell by approximately 31.61% and managed to recover within 6 months.
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Entering the more modern period, this pattern has fundamentally remained consistent. The only significant exception occurred during the COVID-19 pandemic in 2020, when the IHSG underwent a very sharp correction of 75.86% and required 3.5 years for a full recovery. However, the context was distinct, as not only financial markets but also global real economic activities were severely disrupted. Outside of this period, the recovery characteristic has remained swift. Even in 2025, amidst the US reciprocal tariffs, the IHSG recovered in approximately just 2 months.
The conclusion is clear: as long as external pressures do not fundamentally damage domestic economic foundations, the Indonesian capital market tends to recover quickly. The critical question now is, will this pattern repeat under current conditions? What is the present position of the market?
Generally, current conditions bear similarities to previous episodes; pressure originates externally, primarily from geopolitics and global liquidity dynamics. However, it is crucial to note that the Indonesian market is currently undergoing a structural upgrade through comprehensive integrity reforms. If in the past the market recovered without significant structural changes, this time, the recovery potentially unfolds within the framework of a more robust and higher-quality market.
FUTURE DIRECTION
Nevertheless, the current market structure is predominantly driven by retail investors, while the role of domestic institutional investors is not yet optimal. This makes the market relatively sensitive to short-term volatility and foreign fund flows. Therefore, these reforms must be coupled with aggressive market deepening initiatives to ensure long-term resilience.
At this juncture, the market stands at a fascinating crossroads. Will the current pressures follow historical patterns, leading to a quick IHSG recovery? Or will the ongoing reforms necessitate a longer period before new stability is firmly established?
If the reforms successfully boost investor confidence and external factors do not escalate into a systemic crisis, then the probability points towards a rapid rebound scenario. However, if global pressures persist and market adaptation requires more time, the adjustment phase could be prolonged. History offers optimism. Reforms provide direction. Now, the market must prove that these two forces can converge to forge a stronger future.
Summary
Indonesia has implemented significant capital market reforms to enhance transparency and credibility, including new disclosure requirements, refined investor classifications, and improved monitoring of shareholding concentrations. While the market recently faced downward pressure from global volatility and foreign fund outflows, indicators such as robust transaction values and a growing domestic investor base demonstrate underlying resilience. These structural changes represent a proactive shift toward international standards, strengthening the foundation for long-term investability.
Historically, the Indonesian capital market has shown a consistent ability to recover quickly from external shocks, suggesting that the current market adjustment may follow a similar path toward stability. Although the market remains sensitive to short-term volatility due to a high concentration of retail investors, these reforms are expected to bolster investor confidence. Ultimately, the successful integration of these structural upgrades with aggressive market deepening initiatives is positioned to forge a more robust future for the national economy.