The trading of Indonesia’s stock market was halted on Tuesday after the benchmark Jakarta Stock Exchange Composite Index (JKSE) plunged by 5%. The index experienced its steepest drop since September 2021, slipping to 6,146 points, reigniting fears over economic stability and consumer spending habits.
This latest slide in the market sees both local and international investors retreating en masse, reflecting growing anxiety about the country’s macroeconomic framework. Currency pressures are also prevalent, with the USD/IDR rate hovering at 16,420, tightly managed by Bank Indonesia’s interventions.
Noteworthy among the hard-hit sectors are prominent tech and manufacturing firms. DCI Indonesia observed a limit-down decline of 20% for the third consecutive day. Meanwhile, shares in Chandra Asri Pacific sank over 19% following an announcement of a stark 17.4% year-over-year drop in net revenues to $1.8 billion for the fiscal year 2024.
The impending Eid holiday, traditionally a period of heightened consumer spending, is casting a shadow over consumer-facing companies. The Indonesian market is witnessing significant pullbacks across all sectors, according to Nigel Peh, portfolio manager at Timefolio Asset Management. He noted that reduced household expenditure and deflationary signals are further exacerbating market vulnerabilities.
The yield on Indonesia’s 10-year bonds climbed by 3 basis points to 7.03%, signaling investor caution as the country’s economic narrative faces increasing headwinds.
