GOVERNMENT PROMISES MAJOR MARKET REFORMS
Indonesia’s chief economic minister Airlangga Hartarto said authorities were committed to stock market reforms and stressed that the country’s economic fundamentals remained sound.
Proposed measures include doubling the free float requirement of shares to 15 per cent, allowing pension and insurance funds to increase capital market investment to 20 per cent of their portfolio from 8 per cent, and checking the affiliation of shareholders with ownership of less than 5 per cent.
“The government guarantees protection for all investors by maintaining good governance and transparency,” Airlangga said.
Those resigning from OJK alongside Siregar included Inarno Djajadi, chief executive for capital markets, financial derivatives and carbon‑exchange supervision, and Deputy Commissioner IB Aditya Jayaantara, responsible for issuer oversight, transaction supervision and special investigations.
Just hours earlier, Inarno had assured reporters that Rachman’s resignation would not disrupt IDX operations and that OJK aimed to resolve MSCI’s concerns by May.
“We remind all investors to remain calm and rational when making investment decisions,” said Inarno.
Hours later, after markets closed on Friday, he resigned along with the OJK chief.
The benchmark Jakarta Composite Index dropped more than 8 per cent on Wednesday and Thursday, but closed 1.18 per cent up on Friday, after authorities announced the proposed measures to address MSCI’s concerns and ease investor worry.
The rupiah was last at 16,790 to the US dollar, near its weakest-ever rate of 16,985 set last week.
“Someone had to take responsibility for the loss of confidence,” said Mohit Mirpuri, portfolio manager at SGMC Capital in Singapore, referring to Iman.
“The bigger picture is a reset and an opportunity for the exchange to emerge stronger with clearer standards and governance,” Mirpuri said.
FISCAL DEFICIT CONCERNS DRIVE FOREIGN OUTFLOWS
Foreign capital outflows have increased due to concern about President Prabowo Subianto’s widening the fiscal deficit and expanding state involvement in financial markets.
Confidence has also been shaken by this month’s appointment of his nephew Thomas Djiwandono to the central bank and last year’s dismissal of respected Finance Minister Sri Mulyani Indrawati.
Regulators said communication with MSCI has been positive and that they were awaiting a response to their proposed measures, which they hoped to implement soon.
Their swift action appears to have allayed investor concern, but sentiment remains fragile.
“Policymakers want to fix this,” said Paul Dmitriev, senior analyst and co-portfolio manager at Global X ETFs. “The government has every incentive to fix these issues as systemic outflows would be substantial and could materially impact the market.”
Foreign investors sold a net of around US$645 million worth of shares in the two-day sell-off, exchange data showed. They sold US$1 billion worth of shares in 2025.
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