Flooring Guide by Cinvex — The Indonesia Composite Index (IHSG) on the Indonesia Stock Exchange (IDX) closed the Friday trading session with a significant decline, falling 204.9 points or 2.86 percent to settle at 6,969.40.
MNC Sekuritas analyst Herditya Wicaksana noted that the downward trend of the IHSG mirrored the broader weakness across global markets. This bearish sentiment was driven by a combination of external geopolitical factors and mounting pressure on domestic mining stocks.
“This correction aligns with the majority of global and regional Asian markets,” Herditya explained in Jakarta on Friday. “The market is reacting to ongoing US-Iran tensions that have yet to find a diplomatic resolution, coupled with the continued depreciation of the Indonesian rupiah against the US dollar.”
From a technical perspective, Herditya warned that the IHSG currently shows potential for further decline. Beyond global volatility, the most significant domestic pressure stems from the mining sector, following a government proposal to increase royalty rates on minerals and coal (minerba) to boost state revenue.
The government, led by the Ministry of Energy and Mineral Resources (ESDM), has proposed a new progressive royalty scheme for several primary mineral commodities. “This scheme introduces higher royalty caps and adjusts price brackets to maximize state intake when commodity prices rise,” Herditya added.
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Under the proposed revisions, copper concentrate royalties would increase from a flat 7-10 percent to 9-13 percent, while copper cathode royalties would rise from 4-7 percent to 7-10 percent. Gold royalties face an even sharper hike, moving from 7-16 percent to 14-20 percent, with new price brackets reaching above 5,000 USD per ounce.
Additionally, silver royalties are set to shift from a flat 5 percent to a progressive 5-8 percent, and tin royalties will rise significantly from 3-10 percent to a progressive 5-20 percent. For nickel ore, while the tariff remains in the 14-19 percent range, the price interval has been adjusted downward, making it likely that higher tariff thresholds will be triggered more rapidly.
The impact of this sentiment was clearly reflected in the market data, with the basic materials sector (IDXBASIC) plummeting by 7.80 percent. This was followed by the energy sector (IDXENERGY) shedding 4.59 percent, and the transportation sector (IDXTRANS) retreating by 5.72 percent.
Throughout the day, market breadth remained weak: only 138 stocks recorded gains, while 607 declined and 214 remained stagnant. The total market capitalization of the IDX now stands at Rp12,405 trillion. Trading activity saw 54.39 billion shares change hands across 2.8 million transactions, totaling a significant turnover value of Rp36.07 trillion.
Summary
The Indonesia Composite Index (IHSG) experienced a sharp decline of 2.86 percent, closing at 6,969.40 due to global geopolitical tensions and a weakening rupiah. Analysts attribute the bearish sentiment to ongoing instability between the US and Iran, which has negatively impacted both regional and domestic markets. Additionally, technical indicators suggest the potential for further volatility as investors react to these mounting external pressures.
Domestic market performance was severely impacted by the government’s proposal to implement a new progressive royalty scheme for minerals and coal. This policy shift triggered a significant sell-off in the basic materials and energy sectors, with IDXBASIC plummeting 7.80 percent. Consequently, market breadth remained weak, with over 600 stocks declining throughout the trading session.