Bisnis.com, JAKARTA — Amidst lingering political tensions, the panic selling that gripped the Indonesian capital market following recent clashes began to subside on Monday, September 1, 2025. However, market observers agree that a definitive sense of certainty is still crucial for the market to regain its strength and sustain an upward trajectory.
The day’s trading on the Indonesia Stock Exchange (IDX) opened under a cloud of uncertainty, with the benchmark Jakarta Composite Index (IHSG) plummeting by 3.31% to an initial level of 7,571. Nevertheless, the intense selling pressure gradually eased throughout the session, allowing the index to pare back some losses and close at 7,736.06, registering a more moderate daily decline of 1.21%.
Maximilianus Nico Demus, Associate Director of Investment and Research at Pilarmas Investindo Sekuritas, emphasized that the current market and political landscape remains far from conducive for robust growth. He noted that while President Prabowo Subianto has articulated his perspective and outlined forthcoming policy measures, a critical question looms over the specifics of these government actions.
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“The next critical question is, what specific policies will the government implement? Which strategies will prove effective, and most importantly, deliver tangible benefits for the economy and the broader public? These are the answers the market eagerly awaits,” stated Nico on Monday, September 1, 2025.
Nico further elaborated that although the immediate wave of panic selling in the capital market appears to be waning, the market remains in a speculative phase. Both market participants and investors are actively seeking clearer signals and more concrete stances from the government to inform their decisions. Until then, the path forward for the IHSG will remain largely dependent on the clarity provided in the coming days.
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“Certainly, the situation has begun to stabilize, but full certainty has not yet been achieved. Therefore, the trajectory of the IHSG in the days ahead will be determined by these forthcoming developments,” he added, underscoring the delicate balance of market sentiment.
Amidst the prevailing political uncertainties in Indonesia, Nico identified several compelling investment opportunities. He suggested that gold-related stocks present a particularly attractive option, singling out tickers such as ANTM, BRMS, ARCI, and PSAB for investor consideration. Additionally, non-cyclical consumer sector stocks, which are inherently tied to essential goods and services, also warrant close attention given their defensive nature.
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Nico advised investors to target “stocks with strong fundamentals, promising future valuation potential, and those that have undergone recent corrections.” Such assets, he explained, represent prime opportunities for strategic entry into the market during periods of volatility.
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Echoing these sentiments, Helmy Kristanto, an Analyst at BRI Danareksa Sekuritas, noted in his research that the precise impact of the recent demonstrations on the market will largely be dictated by the duration and intensity of the unrest. While the current length of the protests remains undefined, historical patterns suggest that market reactions to such events are typically transient, with losses often recuperating swiftly.
Kristanto further highlighted that a more substantial risk to market stability often stems from underlying macroeconomic weaknesses, which are frequently perceived as primary catalysts for public discontent. He observed that the market reacted sharply to the demonstrations, particularly impacting riskier assets, underscoring investor sensitivity to political events.
Despite these internal pressures, BRI Danareksa Sekuritas also reported resilient foreign portfolio flows in the fourth week of August, recording an inflow of Rp1.5 trillion. This robust performance pushed the total month-to-date (MTD) inflow to an impressive Rp11.3 trillion, marking the highest level in the past 12 months. This inflow significantly helped to offset a portion of the year-to-date (YTD) outflow, which still stands at Rp34.3 trillion.
However, even with the renewed interest from foreign investors, the broader stock market sentiment in Indonesia remained fragile. This vulnerability was evident as the IHSG recorded a 0.4% decline over the week, a direct consequence of the widespread protests across major Indonesian cities that triggered renewed selling pressure. The market now awaits clear policy direction to build on this cautious stability and propel the Indonesian capital market towards a stronger recovery.
Summary
Amidst lingering political tensions, panic selling on the Indonesia Stock Exchange (IDX) subsided on September 1, 2025, with the Jakarta Composite Index (IHSG) recovering from an initial 3.31% drop to close down 1.21%. Market observers, however, stress the need for definitive certainty, especially regarding specific government policies, to achieve sustained market growth. The market remains in a speculative phase, actively awaiting clearer signals and concrete strategies from the government.
Despite the prevailing political uncertainties, strong foreign portfolio inflows, totaling Rp11.3 trillion month-to-date in August, helped offset some year-to-date outflows. While protests often cause transient market reactions, macroeconomic weaknesses are noted as a more substantial risk to stability. Investors are advised to consider gold-related and non-cyclical consumer stocks, focusing on those with strong fundamentals and promising valuations after recent corrections.