Jakarta – Indonesia’s stock market has recently experienced a period of volatility, with the Jakarta Composite Index (IHSG) declining by more than 7% in the past week. On Tuesday (February 11, 2025), during the second trading session, the index fell below the 6,500 psychological threshold, raising concerns among market participants and investors alike. However, analysts urge investors to remain calm, as the country’s economic fundamentals and long-term prospects remain strong.
The recent market downturn is primarily driven by global uncertainties, with geopolitical tensions and economic developments across key regions influencing investor sentiment. According to Mandiri Sekuritas, approximately 35% to 40% of investors in Indonesia’s capital market are foreign participants, making external factors a crucial determinant of market movements.
Oki Ramadhana, President Director of Mandiri Sekuritas, acknowledged the current challenges but emphasized that the core strength of Indonesia’s economy remains intact. Speaking during the Mandiri Investment Forum (MIF) 2025 press conference, he highlighted that while foreign investors may react to short-term global developments, Indonesia continues to offer long-term growth opportunities.
Oki explained that fluctuations in global markets, along with geopolitical developments, play a crucial role in shaping foreign investor behavior. Given the interconnected nature of international markets, investors are constantly assessing risks and opportunities. Despite these external pressures, he reaffirmed that Indonesia’s market remains fundamentally solid, particularly in sectors such as banking, finance, and consumer goods.
Indonesia’s attractiveness as an investment destination stems from several key factors, including a stable regulatory environment, pro-business policies, and legal certainty. These conditions provide investors with a sense of security, reinforcing confidence in the long-term sustainability of their investments. Oki noted that many foreign investors have chosen to maintain their holdings in Indonesia due to its strong economic growth narrative.
A critical component of this growth story is the vision set forth by President Prabowo Subianto’s administration, which aims to achieve an 8% economic growth rate. This ambitious target aligns with the expansion strategies of leading Indonesian companies, which are actively seeking both organic and inorganic growth opportunities. Oki emphasized that corporations across various industries are strategizing to enhance their market positions while contributing to the country’s broader economic agenda.
Despite the short-term turbulence, foreign investors continue to recognize Indonesia as a promising market due to its growth potential, resilient economic structure, and favorable investment climate. Analysts believe that while periodic market fluctuations are inevitable, Indonesia’s economic fundamentals will provide a solid foundation for long-term capital appreciation.
