Bisnis.com, JAKARTA — The Indonesia Composite Stock Index (IHSG) has remarkably surged to a new all-time high (ATH), achieving this milestone despite significant foreign selling pressure. Since the beginning of the year (year-to-date), foreign investors have recorded a substantial net sell totaling Rp52.8 trillion. This remarkable divergence prompts a crucial question: What is the true driving force behind the IHSG’s impressive ascent?
Maximilianus Nico Demus, Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, shed light on this phenomenon. He explained that despite the persistent foreign net selling amounting to Rp52.8 trillion year-to-date, the IHSG has consistently achieved new record highs recently. This resilience, he clarified, signals a pivotal shift in market dynamics.
“This indicates that domestic institutions are once again actively participating. It reflects that our stock exchange is no longer solely dependent on foreign inflow, although such inflow remains an important factor in overall market movements,” Nico stated on Wednesday (September 24, 2025). The continuous strengthening of the IHSG, coupled with increasing daily transaction values, is making Indonesia’s capital market particularly attractive to investors.
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Further bolstering this positive sentiment are key policy actions and evolving economic conditions. The appointment of a new Finance Minister and the implementation of their programs, alongside Bank Indonesia’s pro-growth stance exemplified by its bold interest rate cuts, have contributed significantly to the market’s upward momentum. Looking ahead, expectations are also mounting for the U.S. Federal Reserve to cut its interest rates, which would likely provide Bank Indonesia with greater flexibility to implement further rate reductions by year-end, potentially fueling additional market optimism.
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Despite these robust indicators, Nico offered a note of caution. He observed that the IHSG has already reached quite elevated levels, and several individual stocks have seen considerable upward movement. This situation is prompting many market participants and investors to adopt a “wait and see” approach, anticipating a potential dip in stock prices. Furthermore, concerns about an impending market correction are prevalent, as a healthy correction is often considered a necessary precursor for the index to climb to even higher peaks sustainably.
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Indeed, recent data on daily transaction values at the Indonesia Stock Exchange (IDX) vividly illustrates the heightened market activity. Transaction values have soared dramatically since late last week. On Friday (September 19, 2025), for instance, the IDX recorded a staggering Rp69 trillion in transactions, largely driven by crossing (self-closing) activities. This robust activity continued into the beginning of this week, with daily transaction values reaching Rp22 trillion, then climbing further to Rp31 trillion on Tuesday (September 23, 2025). By Wednesday (September 24, 2025), the market recorded Rp38 trillion in transactions, significantly surpassing the typical daily transaction range of Rp13 trillion to Rp14 trillion.
Summary
The Indonesia Composite Stock Index (IHSG) has achieved a new all-time high, remarkably surging despite significant foreign net selling totaling Rp52.8 trillion year-to-date. This resilience is primarily driven by the active participation of domestic institutions, signaling a pivotal shift where the stock exchange is less dependent on foreign inflow. This increased domestic engagement, combined with rising daily transaction values, is making Indonesia’s capital market particularly attractive.
Further contributing to the positive sentiment are key policy actions, including new government programs and Bank Indonesia’s pro-growth interest rate cuts, with expectations for further reductions. Despite these factors, market participants are adopting a “wait and see” approach due to elevated IHSG levels and anticipate a healthy market correction. Nevertheless, recent data shows a dramatic increase in daily transaction values at the Indonesia Stock Exchange, significantly surpassing typical ranges and indicating heightened market activity.