Indonesia’s Finance Minister, Purbaya Yudhi Sadewa, has addressed the recent sharp decline in the Jakarta Composite Index (IHSG). This market downturn followed the government’s announcement of a new specialized export body for natural resources (SDA), established through Danantara Sumberdaya Indonesia. According to Purbaya, the market has not yet fully grasped the positive implications or benefits stemming from the creation of this export entity.
“Perhaps they don’t yet understand the true impact. When there’s uncertainty, the market inevitably becomes apprehensive, leading them to sell (shares) first,” Purbaya remarked during an interview at the Coordinating Ministry for Economic Affairs on Thursday, May 21.
President Prabowo Subianto had previously outlined the primary objectives of this policy: to strengthen oversight and monitoring, and to eradicate illicit practices such as underinvoicing, transfer pricing, and the flight of foreign exchange earnings from exports. He expressed confidence that this policy would significantly optimize both tax revenues and overall state earnings derived from the management of natural resources.
Purbaya further elaborated that if the stock market were to fully comprehend the profound impact of this new body’s formation, the IHSG’s performance should, in fact, show a significant upward trend. He explained, “Because with this export body in place, underinvoicing will be effectively curtailed. Previously, funds were manipulated by owners abroad; now, these transactions should genuinely reflect in their pure sales.”
He emphasized that the establishment of this export body is poised to make companies more profitable, particularly for corporations listed on the stock exchange, which could potentially reap double the benefits. “Therefore, this should lead to an increase in the valuation of companies listed on the exchange. Gradually, it will rise significantly once the market truly understands its potential,” he asserted.
Echoing this sentiment, Pandu Sjahrir, Chief Investment Officer of Danantara, acknowledged that the IHSG’s dip after the export body’s announcement is a natural reaction as the market awaits tangible results. “God willing, the results will certainly be positive. We will definitely monitor the market closely, and we are optimistic that it will recover swiftly,” Pandu stated.
IHSG Drops Back to the 6,000 Level
The Indonesian stock market has been experiencing sustained pressure, marked by the IHSG’s retreat to levels last seen during the Covid-19 pandemic in 2021, hovering around the 6,000 mark. The benchmark index has plummeted a substantial 28.94% year-to-date and has fallen 19.09% over the past month alone, highlighting a challenging period for investors.
This current slump stands in stark contrast to the IHSG’s historic performance. The index achieved an all-time high (ATH) on January 20, 2026, reaching 9,134 with a market capitalization recorded at Rp 16,590 trillion. However, by May 2026, the IHSG has drifted considerably from the 9,000 level, and its market capitalization has shrunk to Rp 5,948 trillion, representing a steep 35.85% decline from its peak.
On Thursday, May 21, the IHSG concluded the first trading session with a 2.76% decrease, closing at 6,144. Trading volume reached 19.91 billion shares, with a transaction value of Rp 9.78 trillion, bringing the market capitalization to Rp 10.642 trillion.
Analysis from BRI Danareksa Sekuritas indicates that the IHSG’s continued weakening occurred after it breached critical support areas between 6,870 and 7,020. The index is currently trading below its 200-day moving average (MA), a technical signal often interpreted as indicating a dominant bearish or downward trend in the market. From a momentum perspective, the MACD indicator also points to further weakening, suggesting that selling pressure is likely to persist. BRI Danareksa Sekuritas has established key technical levels: resistance at 6,635, support at 6,220, an existing gap area at 6,100, and a significant major support level at 5,900.
Beyond technical factors, the brokerage firm also attributed the IHSG’s plunge to a confluence of domestic and global pressures. Domestically, the 50-basis-point increase in the BI Rate to 5.25% has ignited market concerns over tightening liquidity and a rising cost of capital for issuers. Furthermore, selling pressure from investors heavily impacted stocks within the Prajogo Pangestu group, including BREN, TPIA, and BRPT, which acted as significant drag on the overall index.
Summary
The Jakarta Composite Index (IHSG) experienced a sharp decline following the government’s establishment of a new export agency, Danantara Sumberdaya Indonesia, for natural resources. Finance Minister Purbaya Yudhi Sadewa attributed the market downturn to a misunderstanding of the new body’s benefits, which aim to strengthen oversight, curb illicit practices like underinvoicing and capital flight, and ultimately optimize state revenues. He emphasized that the agency would increase company profitability and, once fully understood, should lead to a significant rise in IHSG valuation.
Despite the government’s optimism, the IHSG has fallen to the 6,000 level, marking a 28.94% year-to-date decrease. Technical indicators show the index trading below key support areas, while domestic pressures, including a 50-basis-point increase in the BI Rate and heavy selling in major stock groups, also contributed to the sustained market weakness.
