Flooring Guide by Cinvex – JAKARTA – The Indonesian stock market is currently navigating a significant wave of foreign capital outflow, even as the benchmark Jakarta Composite Index (IHSG) remarkably manages to stay in positive territory. Throughout the year to date, foreign investors have collectively withdrawn tens of trillions of rupiah from the Indonesia Stock Exchange (IDX), signaling cautious sentiment.
Recent data from the IDX underscores this trend. On Wednesday, October 15, 2025, the Indonesian stock market recorded a net foreign sell of IDR 1.39 trillion. This figure contributes to a staggering cumulative net foreign sell of IDR 53.96 trillion since the start of 2025, highlighting a consistent pattern of divestment by international investors.
Several prominent stocks have borne the brunt of this foreign sell-off. Jumbo banking stocks, traditionally cornerstones of the index, have seen substantial exits. PT Bank Central Asia Tbk. (BBCA), for instance, registered a net foreign sell of IDR 32.16 trillion, while PT Bank Mandiri Tbk. (BMRI) experienced a net foreign sell of IDR 17.73 trillion.
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Despite this significant foreign divestment, the IHSG has demonstrated surprising resilience. As of yesterday’s trading, the index remained firmly in the green zone, strengthening by 13.72% year-to-date to reach 8,051.17.
Rully Arya Wisnubroto, Head of Research & Chief Economist at Mirae Asset Sekuritas Indonesia, attributed the exodus of foreign funds to several factors, particularly mounting concerns over domestic economic conditions. “Foreign investor apprehension has not subsided, especially regarding the prudence of fiscal policies. When considering entry, they also closely monitor the rupiah’s stability. If fiscal risks are perceived to be high, leading to rupiah depreciation, they will undoubtedly reconsider their investments,” Rully explained during a Media Day event hosted by Mirae Asset Sekuritas Indonesia on Thursday, October 16, 2025.
Consequently, the Indonesian stock market is currently largely sustained by domestic retail investors. The IHSG’s continued strength in the green zone is predominantly driven by multi-bagger stocks associated with influential conglomerates. In contrast, even major banking stocks, typically strong index supporters, have not performed as robustly this year.
“The valuations of these market-driving conglomerate stocks—from Prajogo Pangestu, Sinarmas, to Salim—are already exceptionally high. Their price-to-earnings (P/E) ratios are in the hundreds of times, while their fundamental growth remains stagnant,” Rully elaborated, pointing to potential overvaluation.
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Echoing these sentiments, Investment Analyst at Infovesta Utama, Ekky Topan, emphasized that a sustained outflow of foreign capital from the Indonesian stock market would have significant repercussions. Large-cap stocks, especially those with substantial foreign ownership, would likely face the most intense pressure.
“Overall, the IHSG could also experience a deeper decline, as widespread negative sentiment would prompt investors to reallocate their funds to more defensive instruments,” Ekky noted. Beyond pressure on the stock market, foreign outflows would also strain the rupiah exchange rate, and in extreme scenarios, could deplete Bank Indonesia’s foreign exchange reserves as it intervenes to maintain stability.
“However, it’s crucial to acknowledge that these impacts would become considerably greater if this outflow trend persists without being counterbalanced by new positive sentiment,” Ekky concluded, offering a nuanced perspective on the market’s trajectory.
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Summary
The Indonesian stock market is currently navigating a significant foreign capital outflow, with cumulative net foreign sells reaching IDR 53.96 trillion year-to-date in 2025. Major banking stocks like PT Bank Central Asia Tbk. (BBCA) and PT Bank Mandiri Tbk. (BMRI) have been particularly impacted by this divestment. Despite this trend, the Jakarta Composite Index (IHSG) has shown remarkable resilience, strengthening by 13.72% year-to-date. This resilience is largely driven by domestic retail investors and multi-bagger stocks associated with influential conglomerates, despite their high valuations.
Foreign investor apprehension is primarily attributed to concerns over domestic economic conditions, particularly fiscal policy prudence and rupiah stability. Analysts indicate that a sustained foreign capital outflow could lead to a deeper IHSG decline, especially for large-cap stocks. Such a prolonged trend would also exert pressure on the rupiah exchange rate and potentially deplete Bank Indonesia’s foreign exchange reserves if not counterbalanced by new positive sentiment.