JCI Continues To Drop, Economist: The Government Needs To Be More Careful In Planning Economic Policy

Photo: Doc. Antara

JAKARTA - Head of Research & Chief Economist Mirae Asset Rully Arya Wisnubroto assessed that the current government needs to be more careful in designing and implementing economic policies after the Composite Stock Price Index (JCI) experienced a correction of more than 5 percent in trading on Tuesday, March 18.

As is known, the Indonesia Stock Exchange (IDX) also had time to implement a temporary suspension of trading or trading stop after the JCI recorded a decline of more than 5 percent in Tuesday morning's trading session.

At the close of trading in the afternoon, the JCI ended at 6,223.39 after weakening 3.84 percent, while the LQ45 index fell 2.79 percent to 709.01.

"We consider that the Government must be careful in determining policies in the economic sector, including changing the economic team, which has received very high market confidence," said Rully, quoted by Antara, Wednesday, March 19.

According to Rully, Tuesday's JCI drop was triggered by a combination of external and domestic factors that suppressed investor confidence in the Indonesian stock market.

The first factor, he highlighted that the Indonesian stock market is still experiencing a fairly large outflow or foreign outflow, adding to the pressure on the JCI.

For the past few days, not only superior stocks, but stocks classified as speculatives have also experienced a significant decline, such as DCII, TPIA, and BREN. The superior shares today were also hit by selling actions such as BBRI and BBCA. Currently, market optimism is relatively very low in Indonesia's economic prospects this year," he explained.

The second factor is economic policy that triggers concern. Rully said several government policies also exacerbated market sentiment.

"In addition, various policies have caused anxiety, such as budget cuts, the establishment of Danantara, the establishment of the Red and White Cooperative which will involve state-owned banks, and several other policies," he said.

The latest development that has raised market concerns is that there is a widely heard issue regarding the resignation of the Minister of Finance of the Republic of Indonesia Sri Mulyani Indrawati.

This has the potential to shake investor confidence, given its role that has gained high trust in maintaining fiscal stability.

Another factor that has also had an impact on today's stock exchange trading is the influence of US trade rates and the US central bank (The Fed) decision.

On the global side, the US trade rate policy towards its trading partners also provides pressure, although not the main factor. This is because some regional exchanges actually strengthen, indicating that the weakening of the JCI is more influenced by domestic factors.

Meanwhile, Associate Director of Pilarmas Investindo Sekuritas Maximilianus Nicodemus said market participants were also waiting and see the results of the Bank Indonesia Board of Governors Meeting (RDG BI) which will be held on Wednesday (19/03) and the Federal Open Market Committee (FOMC) The Fed on Thursday (20/03).

As for the Chief Executive of the Capital Market Supervisory, Financial Services Authority (OJK) Derivative Finance, Inarno Djajadi, said that his party was preparing various policies (policy) as an effort to maintain JCI stability.

"We also give to fellow journalists that we have some policies that we will do," said Inarno.

He said that the various policy efforts would be presented at the OJK Policy Response Press Conference to Anticipate Stock Trading Volatility at the IDX Main Hall, this Wednesday.

Inarno said that his party together with the IDX on March 3, 2025 had established several policies to maintain JCI stability.

On March 3, 2025, OJK and IDX decided to postpone the implementation of short selling and will conduct a study related to share buyback without a general meeting of shareholders (GMS).

The effort was made in line with the OJK and the IDX having held a dialogue with capital market players in response to the constant pressure that occurred at the Composite Stock Price Index (JCI).

"By considering these conditions and getting input from market stakeholders and stakeholders, OJK will take the initial policy, first is to postpone the implementation of short selling activities," he said.

In addition to this, there is another policy option that, if needed, is to review the share buyback without a GMS while still paying attention and considering the situation and conditions that will occur later.

In making this policy, his party will focus on three things, including market stability, increased liquidity, and investor protection.