Foreign investors rush Into Indonesian stocks after market sell-off

..they naturally conclude that this is the right time to buy,

Jakarta (ANTARA) - Head of the Danantara Investment Management Agency, Rosan Roeslani, stated that a 40 percent correction in the Indonesian capital market over recent months has triggered a wave of buying by foreign investors seeking undervalued various domestic equities.

"Indeed, if we look at the correction that occurred over the past few months—almost 36 to 40 percent in our capital market—this has caused the pricing of our companies to become very affordable, very good, very cheap in fact," Rosan told reporters at the Presidential Palace Complex, Jakarta, on Monday.

According to him, the market downturn has reached a point where many foreign investors now see significant value in Indonesian assets, helping drive a recovery in both the Jakarta Composite Index (JCI) and the rupiah after a period of heightened volatility.

Rosan explained that global investors have been guided by fundamental economic considerations, identifying Indonesian companies whose valuations have fallen substantially below their intrinsic worth.

He noted that several major listed companies are trading at levels well below their price-to-book valuations, prompting international fund managers to increase exposure, particularly in the banking and industrial sectors.

“It goes back to the laws of economics. When investors see that our fundamentals remain strong, our banking sector continues to grow, dividends are attractive, yields are competitive, and stock prices are trading below book value, they naturally conclude that this is the right time to buy,” he said.

Rosan emphasized that Indonesia’s medium- and long-term economic fundamentals remain solid and are expected to support a sustained recovery in the financial markets.

He added that while the decline in asset prices initially raised concerns about a prolonged market slump, the strong dividend performance of domestic financial institutions has helped prevent a significant outflow of foreign capital.

The government believes that continued foreign purchases of Indonesian equities could further support the rupiah against the US dollar, provided that capital inflows remain strong throughout the remainder of the year.

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Translator: Aditya Ramadhan, Maria Cicilia Galuh, Yashinta Dif

Editor: M Razi Rahman

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