Indonesian Market Rebounds as Conglomerates Launch Buybacks
The Indeks Harga Saham Gabungan bounced back following a steep two-day selloff triggered by MSCI’s consultation announcement regarding a potential downgrade of Indonesian equities to a standalone market. CNBC Indonesia reported that the index rallied 3.12% to 5,152.66 by mid-morning on October 20, 2026, recovering from a drop that saw it touch 4,907.37 the previous day. In response to the market stress, major corporate groups and banks announced sweeping share buybacks to stabilize valuations.
Prajogo Pangestu’s business groups deployed capital to defend share prices after hitting auto-reject lower limits. IDNFinancials reported that PT Barito Pacific Tbk and PT Chandra Asri Pacific Tbk initiated a combined Rp2 trillion share buyback effective October 19, 2026. Additional entities within the group, including PT Barito Renewables Energy Tbk and PT Petrindo Jaya Kreasi Tbk, committed Rp1 trillion and Rp500 billion respectively, bringing the total buyback allocation from Pangestu-backed firms to Rp3.5 trillion.
Indonesia Stock Exchange modifies rules to prevent distortions
The Indonesia Stock Exchange intervened by modifying trading rules and index calculation methods. snips.stockbit.com noted that the exchange announced plans to exclude approximately 80 High Shareholding Concentration stocks from the IHSG calculation, removing an 18% weight to prevent concentrated selloffs from distorting the broader gauge. Concurrently, the exchange adjusted asymmetric auto-rejection lower limits, which were 7% as of October 19, 2026, with new provisions effective from October 20 to December 31, 2026.
State involvement also expanded as market pressure intensified. CNBC Indonesia reported that Danantara CEO Rosan Roeslani and COO Dony Oskaria stated readiness to increase investments in fundamentally sound state-owned enterprises, viewing the valuation drop as a long-term entry opportunity.
Why MSCI is consulting on Indonesian equities?
Why did MSCI initiate a consultation on Indonesian equities?
MSCI launched a consultation process exploring a potential downgrade of the Indonesian stock market to standalone market status, which triggered heavy foreign capital outflows and a sharp index decline.
What is the timeline for the MSCI market consultation process?
Market participants have until April 30, 2027, to submit feedback to MSCI, with a final decision scheduled for announcement by June 30, 2027, as reported by CNBC Indonesia.
How much capital have Prajogo Pangestu’s companies committed to buybacks?
Entities including PT Barito Pacific Tbk, PT Chandra Asri Pacific Tbk, PT Barito Renewables Energy Tbk, and PT Petrindo Jaya Kreasi Tbk have collectively allocated Rp3.5 trillion for share buybacks, according to IDNFinancials.
What changes did the Indonesia Stock Exchange make to stock index calculations?
The exchange announced plans to exclude roughly 80 High Shareholding Concentration stocks representing an 18% weight from the IHSG calculation so that concentrated volatility no longer dictates the headline index performance.
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