Jakarta, IDN Times – The Indonesian Financial Services Authority (OJK) has revealed that the average stock valuation in Indonesia is currently more attractive compared to its regional counterparts. This favorable valuation emerges as the Composite Stock Price Index (IHSG) continues to drift significantly from its all-time high (ATH) recorded in early 2026.
Hasan Fawzi, the OJK’s Chief Executive of Capital Market, Derivative Finance, and Carbon Exchange Supervision, attributed this market dynamic to ongoing global uncertainties. He specifically highlighted that the average Price to Earnings Ratio (PER) for Indonesian stocks now stands at 16 times.
During a press conference at the Indonesia Stock Exchange (BEI) building on Wednesday, May 13, 2026, Fawzi elaborated, “Our IHSG is now well below its all-time high achieved in mid-January. Currently, even when compared to regional peers, the average PER of our stocks is below the average PER of other exchanges, now resting at the 16x level.” This indicates a potentially undervalued Indonesian stock market in the regional context.
1. An Opportune Moment for Capital Market Investors
In light of the current market conditions, Hasan Fawzi views this period as a compelling investment opportunity for investors looking to enter the capital market. He strongly advised a selective approach, urging investors to identify stocks with robust long-term prospects.
“We hope our investors will judiciously seize this momentum to enter the market and select the best stocks, which are prospectively positioned to consistently enhance their performance over time,” Hasan stated, emphasizing strategic, rather than impulsive, investment decisions.
2. IHSG Faces Short-Term Pressure Amidst MSCI Rebalancing
The IHSG experienced renewed selling pressure during today’s trading session. The index opened down by 94.96 points (-1.38 percent), reaching 6,763.94, and remained in negative territory throughout the morning. While the IHSG had previously touched its all-time high in mid-January 2026, the OJK characterizes today’s downturn as a short-term reaction primarily influenced by the impending MSCI rebalancing announcement.
Hasan Fawzi commented on the day’s performance, saying, “If we observe trading until 10 AM today, a decline in the index was confirmed. However, the level of trading activity remains within reasonable limits, and we view this as a consequential reaction to the rebalancing.” This suggests the OJK sees the current pressure as a temporary market adjustment rather than a fundamental shift.
3. Six Indonesian Stocks Removed from MSCI Global Standard Index Amid Rebalancing
Adding to the market’s current dynamics, MSCI previously announced its May 2026 global index review. In its latest update, MSCI decided to remove six domestic Indonesian stocks from the MSCI Global Standard Index, with no new additions to this prestigious list. This significant decision impacts several prominent companies, potentially affecting their international visibility and investor interest.
The six stocks delisted from the MSCI Global Standard Index include: PT Amman Mineral International Tbk (AMMN), PT Barito Renewables Energy Tbk (BREN), PT Chandra Asri Pacific Tbk (TPIA), PT Dian Swastatika Sentosa Tbk (DSSA), PT Petrindo Jaya Kreasi Tbk (CUAN), and PT Sumber Alfaria Trijaya (AMRT). This move often prompts adjustments by institutional investors tracking these indexes.
Furthermore, MSCI also made changes to its MSCI Global Small Cap Indexes, delisting 13 domestic stocks while simultaneously adding one. Notably, PT Sumber Alfaria Trijaya (AMRT), which was removed from the Global Standard Index, was subsequently added to the Global Small Cap Index.
The 13 stocks removed from the MSCI Global Small Cap Index are:
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PT Aneka Tambang Tbk (ANTM)
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PT Astra Agro Lestari Tbk (AALI)
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PT Bank Aladin Syariah Tbk (BANK)
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PT Bumi Serpong Damai Tbk (BSDE)
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PT Dharma Satya Nusantara Tbk (DSNG)
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PT Industri Jamu dan Farmasi Sido Muncul Tbk (SIDO)
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PT Midi Utama Indonesia Tbk (MIDI)
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PT Mitra Keluarga Karyasehat Tbk (MIKA)
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PT MNC Digital Entertainment Tbk (MSIN)
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PT Pabrik Kertas Tjiwi Kimia Tbk (TKIM)
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PT Pacific Strategic Financial Tbk (APIC)
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PT Sawit Sumbermas Sarana Tbk (SSMS)
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PT Triputra Agro Persada Tbk (TAPG)
All these announced changes by MSCI are set to become effective at the close of trading on May 29, 2026, marking a significant adjustment for the affected Indonesian stocks and the broader market.
Summary
The Indonesian Financial Services Authority (OJK) indicates that Indonesian stock valuations are currently attractive, with the Composite Stock Price Index (IHSG) significantly below its early 2026 all-time high. The average Price to Earnings Ratio (PER) for Indonesian stocks stands at 16 times, which is below the regional average. OJK Chief Hasan Fawzi sees this period as a compelling investment opportunity, urging investors to selectively identify stocks with strong long-term prospects.
The IHSG is experiencing short-term selling pressure, attributed primarily to the impending MSCI rebalancing announcement. MSCI’s May 2026 global index review resulted in the removal of six Indonesian stocks from the MSCI Global Standard Index and 13 from the MSCI Global Small Cap Index, with PT Sumber Alfaria Trijaya (AMRT) added to the latter. These significant changes are scheduled to take effect at the close of trading on May 29, 2026.
