By The Straits Times | Created at 2025-03-18 06:59:26 | Updated at 2025-03-20 12:28:16
2 days ago
Indonesian stocks tumbled by the most in over a decade on March 18, triggering a trading halt for the first time since the pandemic, as concerns about a weakening economy and softer consumer spending hit investor sentiment.
The Jakarta Composite Index slid as much as 7.1 per cent, the biggest intraday slump since September 2011. PT DCI Indonesia, a provider of data center services, and PT Bank Rakyat Indonesia, were the biggest point drags, with the former down by a 20 per cent limit.
The market hit a 30-minute temporary suspension after falling through a 5 per cent threshold for the first time since late 2020. The JCI gauge resumed its slide after the halt was lifted. Hitting the next key threshold – a 10 per cent drop – could trigger another suspension. The rupiah weakened 0.3 per cent against the dollar. The currency is the worst performer in Asia this year.
Concerns about the growth prospects for Southeast Asia’s largest economy are mounting following President Prabowo Subianto’s recent directives to reallocate funds toward his priority projects. The country posted a rare budget deficit early into the year, with state revenues dropping more than 20 per cent year-on-year.
March 18’s rout is linked to position unwinding and forced liquidations, especially by margin traders, said Mohit Mirpuri, fund manager at SGMC Capital Pte. “Sentiment is still weak and no fresh inflows to support the market ahead of the long break.”
The rout accelerates the downturn in Indonesian stocks, cementing their position as some of the world’s worst performers this year. A stronger dollar and the escalating trade tensions have sparked an investor exodus, with foreign funds pulling about US$1.65 billion (S$2.2 billion) of local shares on a net basis so far in 2025, according to data complied by Bloomberg
All eyes are now on Bank Indonesia’s rate decision on March 19, as investors await a potential intervention to stabilise the currency and boost growth. BLOOMBERG
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