Indonesian stocks enter a bull market on rally from five-year low
An Indonesian worker walks next to a screen with market trading information at the Indonesian Stock Exchange (IDX) in Jakarta.
Adek Berry | AFP | Getty Images
Attractive valuations, rapid intervention by local financial regulators and the gradual return of foreign investors have helped Indonesian stocks achieve bull market status. hit Five-year low in early June.
Indonesia’s Jakarta Stock Exchange Composite Index is down nearly 29% since the beginning of the year, but has reached the bull market threshold with a 10% gain since its bottom last month, according to LSEG data. S&P Global ratings reaffirming Indonesia’s BBB credit rating with a stable outlook a few weeks ago helped boost sentiment.
“S&P’s approval removed a significant macro overhang,” said Mohit Mirpuri. Senior partner at SGMC Capital. “Over the past month, we have seen the market transition from deteriorating pricing to stabilizing pricing.”
Indonesian shares have been on a roller-coaster ride through much of 2026 after index provider MSCI questioned management on many of the country’s stocks and said it would consider downgrading the market from emerging to frontier status. For example, many companies have low public float and very low ownership concentration.
According to Gareth Leather, senior economist at Capital Economics, MSCI ultimately decided to postpone the downgrade of Indonesia’s market status; this was a “huge relief” for investors and helped stop panic selling. He said investors are starting to take profits from expensive AI and technology stocks and are looking for safer, affordable markets in which to invest their cash.
“After months of heavy selling, Indonesian stocks have become too cheap to ignore,” Kiwoom Sekuritas Indonesia head of research Liza Camelia told CNBC.
Camelia noted that investors are relieved that fiscal risks may be less severe than previously feared, after government revenues surprised on the upside as tax collections rebounded strongly in the first half.
Jeemin Bang, associate economist at Moody’s Analytics, said the Indonesian regulator’s measures to have a higher minimum free float and stricter ownership disclosure requirements also help “address the market’s weak liquidity and the resulting transparency and concentration issues that have driven some investors away from the market.”
