After months of net selling, foreign investors returned to Indonesian equities,
lifting the Jakarta Composite Index more than 5% this week and positioning it
for its strongest weekly gain since mid‑June. The index rose as much as 2.1% on
Friday, outperforming regional peers. The rebound follows a sell-off sparked by
an MSCI warning that Indonesia could be downgraded from emerging to standalone
market, which pushed valuations to decade‑plus lows. The Indonesia Stock
Exchange removed 300 highly concentrated stocks from its benchmark this week to
improve liquidity and equity transparency. Foreign investors were net buyers of
$38 mln of Indonesian shares this week, the first weekly net inflow since early
September; global funds also increased holdings of Indonesian government bonds.
Analyst Herditya Wicaksana said cheaper valuations and improved sentiment have
drawn funds back into large caps, notably banks, driving the rally.
