IHSG Weakens as Investors Eye OJK’s Capital Market Transparency Reforms
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- Indonesia’s IHSG fell 0.53% Tuesday as markets assess OJK’s transparency reforms, including lower share ownership thresholds and higher free float, with experts predicting MSCI gains.
- Amid global rallies, IHSG tests support at 7,790; Pilarmas analyst highlights OJK-BEI steps to boost investor trust and counter selling pressure.
- OJK’s ownership disclosure and free float hikes aim to deepen liquidity, potentially drawing foreign funds despite IHSG’s early weakness.
The Composite Stock Price Index (IHSG) weakened on Tuesday morning, reflecting ongoing market scrutiny of efforts to boost transparency in Indonesia’s capital markets.
The IHSG opened down 42.25 points, or 0.53 percent, at 7,880.47, while the LQ45 Index bucked the trend, rising 2.89 points or 0.36 percent to 809.13.
“From a technical analysis perspective, we see the IHSG potentially facing limited downside with support and resistance levels between 7,790 and 8,270. Upside potential is emerging, but investors should remain cautious of any setbacks,” said Maximilianus Nico Demus, or Nico, Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, in his analysis from Jakarta on Tuesday.
Nico believes steps by the Financial Services Authority (OJK), along with the Indonesia Stock Exchange (BEI) and the Indonesian Central Securities Depository (KSEI), could positively impact the capital market, particularly by enhancing credibility and global investor confidence.
In his view, lowering the disclosure threshold for share ownership above 1 percent and revealing beneficial owner information will strengthen transparency while addressing MSCI concerns over hidden ownership that have long lingered.
“Additionally, improved investor classification will provide better visibility into market structure, supporting more accurate risk assessments and liquidity evaluations,” Nico added.
The planned gradual increase in minimum free float to 15 percent is also seen as a move to deepen liquidity and broaden the investor base, though some issuers may need short-term strategy adjustments.
Overall, consistent and timely implementation of these policies could significantly improve MSCI’s perception of Indonesia, paving the way for increased foreign inflows in the medium to long term.
“We currently need short-term policies to halt the massive selling pressure underway,” Nico said.
Overseas, U.S. ISM Manufacturing data climbed from 47.9 to 52.6, marking the fastest pace since 2022, fueled by strong new orders and production growth.
In Europe, the ECB and Bank of England are set to announce monetary policy decisions this week.
U.S. trading on Monday closed higher, with the Dow Jones up 515.19 points or 1.05 percent to 49,407.66, the S&P 500 gaining 0.54 percent to 6,976.44, and the Nasdaq Composite rising 0.56 percent to 23,592.11.
Asian markets were mostly positive Tuesday morning, with the Nikkei surging 1,644.60 points or 3.12 percent to 54,299.80, Shanghai up 18.20 points or 0.45 percent to 4,033.99, Hang Seng adding 44.08 points or 0.16 percent to 26,819.66, and the Straits Times climbing 44.70 points or 0.91 percent to 4,936.83.
Indonesianpost.com | Kabarin
