--- title: "Reversal in Just One Month! Indonesian Stock Market Moves from \"Five-Year Low\" to \"Technical Bull Market\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/294160375.md" description: "The Indonesian stock market staged a stunning reversal—rebounding more than 10% from its five-year low and officially entering bull market territory. The suspension of the MSCI downgrade alleviated panic, while S&P's affirmation of the BBB rating boosted confidence. Valuations fell to levels \"too cheap to ignore,\" attracting foreign capital backflow. Coupled with regulatory efforts to address chronic corporate governance issues, these multiple positive factors resonated to shift the market from \"panic selling\" to \"confidence restoration.\"" datetime: "2026-07-29T06:09:51.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294160375.md) - [en](https://longbridge.com/en/news/294160375.md) - [zh-HK](https://longbridge.com/zh-HK/news/294160375.md) --- # Reversal in Just One Month! Indonesian Stock Market Moves from "Five-Year Low" to "Technical Bull Market" After months of selling pressure, the Indonesian stock market completed a dramatic reversal, rebounding strongly from the five-year low touched last month and officially entering bull market territory. Valuation repair, rapid regulatory intervention, and the gradual return of foreign capital jointly drove this transformation. The Jakarta Composite Index has fallen by approximately 29% year-to-date, but according to data from LSEG (Refinitiv), the index has rebounded more than 10% since its early June low, reaching the threshold for a bull market determination. A few weeks ago, S&P Global confirmed it would maintain Indonesia's BBB sovereign credit rating with a stable outlook, further boosting market sentiment. Mohit Mirpuri, Senior Partner at SGMC Capital, stated, "S&P's confirmation eliminated a significant macro uncertainty. Over the past month, the market's pricing logic has shifted from reflecting deteriorating fundamentals to reflecting stabilizing corporate fundamentals." This rebound is significant for investors. The Indonesian stock market had previously been under dual pressure from corporate governance controversies and foreign capital outflows, with market confidence once hitting rock bottom. As multiple positive factors converged, market sentiment underwent a substantive shift, providing emerging market investors with a window to re-evaluate Indonesian assets. ## MSCI Suspends Downgrade, Curbing Panic Selling For much of 2026, the Indonesian stock market experienced intense volatility, triggered by concerns raised by index compiler MSCI regarding the corporate governance of several Indonesian stocks. MSCI indicated it was considering downgrading Indonesia from an emerging market to a frontier market. Structural issues long plaguing the Indonesian market, such as a low proportion of free-float shares and high ownership concentration, were the core concerns highlighted by MSCI. According to CNBC, Gareth Leather, Senior Economist at Capital Economics, stated that MSCI's final decision to suspend the downgrade was a "huge relief" for investors, effectively curbing panic selling. Meanwhile, some investors began taking profits from overvalued AI and technology stocks, turning instead to allocate capital to markets with more attractive valuations. ## Valuation Appeal Emerges, Reigniting Foreign Interest As share prices continued to fall, the valuation appeal of Indonesian stocks became increasingly prominent. Liza Camelia, Research Head at Kiwoom Sekuritas Indonesia, told CNBC, "After months of massive selling, Indonesian stocks have become too cheap to ignore." Positive fiscal signals also injected confidence into the market. Camelia pointed out that government tax revenue rebounded strongly in the first half of the year, with fiscal income exceeding expectations. This alleviated previous market concerns about fiscal risks, as the actual situation proved better than earlier pessimistic expectations. The proactive measures taken by Indonesian financial regulators were also a key support for this rebound. Regulators introduced initiatives such as raising the minimum free-float share ratio and strengthening equity information disclosure requirements, directly addressing core market demands regarding insufficient liquidity and lack of transparency. Jeemin Bang, Deputy Economist at Moody's Analytics, stated that these measures help "address weak market liquidity and the resulting transparency and ownership concentration issues, which had previously led some investors to exit." The regulators' rapid response has, to some extent, rebuilt basic market trust in the institutional environment of Indonesia's capital market. ### Related Stocks - [EIDO.US](https://longbridge.com/en/quote/EIDO.US.md) - [SPGI.US](https://longbridge.com/en/quote/SPGI.US.md) - [MSCI.US](https://longbridge.com/en/quote/MSCI.US.md) - [MCO.US](https://longbridge.com/en/quote/MCO.US.md) ## Related News & Research - [S&P flags Indonesia policy uncertainty after central bank governor quits, affirms ratings](https://longbridge.com/en/news/294004377.md) - [Cattle Look to React to Border Reopening News on Monday Morning](https://longbridge.com/en/news/293933971.md) - [The Market Is Starting To Crack](https://longbridge.com/en/news/293662446.md) - [Cattle Get a Thursday Bounce, with Beef Slipping in the PM Report](https://longbridge.com/en/news/293674183.md) - [S&P 500 bull markets have historically outweighed bear market losses](https://longbridge.com/en/news/293930426.md)