Indonesia's regulator defends market as stocks extend slide

Jakarta (ANTARA) - Indonesia’s financial regulator sought to reassure investors after the Jakarta Composite Index capped a turbulent week with a 4.20 percent decline to 5,594.77, saying corporate earnings and market fundamentals remain resilient despite mounting volatility.

The Financial Services Authority, or OJK, said listed companies posted aggregate first-quarter profit growth of more than 21 percent from a year earlier, underscoring the strength of corporate performance.

“Most listed companies continued to generate profits,” Hasan Fawzi, OJK’s chief executive for capital market supervision, said at a press briefing on Friday.

Historical performance data and earnings prospects should provide investors with a rational basis for evaluating investment opportunities, Hasan said.

The regulator’s comments came after a wave of heavy selling rattled Indonesia’s equity market and pushed benchmark stocks deeper into correction territory.

By the end of May, the Jakarta Composite Index had fallen 11.92 percent from a month earlier, extending its year-to-date decline to 29.14 percent.

Related news: IDX urges calm after sharp Jakarta Composite Index correction

The selloff intensified midweek, with the benchmark index dropping 4.11 percent on Wednesday to 5,941.07 after investors reduced exposure to domestic equities.

The index extended losses on Thursday, sliding another 1.70 percent after touching an intraday low, reflecting persistent pressure across major sectors.

Selling accelerated again on Friday, sending the benchmark down 4.20 percent and leaving it at 5,594.77 by the close.

According to the OJK, the recent turbulence reflects investor reactions to evolving global and domestic macroeconomic conditions rather than weaknesses within Indonesia’s financial system.

A major factor has been global index rebalancing activity, which has prompted international fund managers to adjust asset allocations and reduce holdings in Indonesian stocks.

Despite the downturn, Hasan urged both retail and institutional investors to assess market conditions objectively and avoid making decisions driven by short-term sentiment.

“Investment decisions should be based on analysis, verified disclosures and company fundamentals, particularly during periods of heightened market volatility,” Hasan said.

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Translator: Rizka Khaerunnisa, Yashinta Difa

Editor: Rahmad Nasution

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