OJK and IDX Strengthen Market Stability, Tycoons Ready for Share Buyback

The Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) reaffirmed their commitment to maintaining market stability and strengthening asset fundamentals. As part of their strategy, regulators have invited Indonesia’s top business tycoons to a high-level discussion aimed at mitigating the prolonged correction in the Jakarta Composite Index (JCI).

Head of OJK’s Capital Market, Derivative Finance, and Carbon Exchange Supervision, Inarno Djajadi, announced that several policies would be implemented to stabilize stock prices. These measures include providing investors with decision-making flexibility and adjusting trading operations to enhance market efficiency. One key policy is the postponement of short selling, along with a review of relaxed buyback regulations allowing repurchases without requiring a General Meeting of Shareholders (GMS).

"The decline in stock indices is not unique to Indonesia but has also affected global markets. As a result, regulators in various countries have introduced measures to stabilize their respective markets," Inarno stated at a press briefing in Jakarta on Monday (March 3, 2025).

JCI Under Pressure from Global and Domestic Factors

IDX President Director Iman Rachman highlighted that both global and domestic factors have contributed to market uncertainty. A major driver of JCI’s recent decline is the escalating trade war between the United States and its trading partners.

Additionally, investors are closely watching global interest rate policies, particularly the Federal Reserve’s tightening stance, which has placed pressure on emerging markets and spurred a surge in demand for safe haven assets.

Iman further noted that Morgan Stanley’s downgrade of Indonesian stocks from equal weight to underweight has exacerbated the downturn. The downgrade was based on weakening domestic economic growth prospects and rising profitability pressures on cyclical sectors.

"Another major drag on JCI is the continued depreciation of the rupiah. As of Friday (Feb 28, 2025), Bloomberg recorded the rupiah at IDR 16,580 per US dollar, a 2.88% decline since the beginning of the year, marking its lowest level since April 2020," Iman explained.

Tycoons Ready for Share Buybacks

PT Alamtri Resources Indonesia Tbk (ADRO) President Director Garibaldi "Boy" Thohir welcomed OJK’s policies, stating that the current JCI condition does not accurately reflect the fundamentals of blue-chip stocks.

"We’re not too worried about JCI’s decline as it’s mainly driven by external factors. We are prepared to execute a buyback as soon as approval is granted," he said.

However, Boy noted that the exact buyback amount would require discussions with the company’s board and shareholders. "We need to meet with the BOD first," he added.

Similarly, Indonesian Chamber of Commerce and Industry (Kadin) Advisory Board Chairman Arsjad Rasjid and Kadin Chairman Anindya Bakrie highlighted the possibility of affiliated companies conducting share buybacks in response to JCI’s downturn.

Arsjad, who also serves as President Director of PT Indika Energy Tbk (INDY), emphasized that a flexible buyback mechanism without requiring a GMS could be an effective strategy for stabilizing stock prices.

"A share buyback is one way to protect listed companies from excessive market pressure. If buyback decisions have to wait for a GMS, strategic opportunities might be missed," he explained.

Meanwhile, Anindya Bakrie pointed out that share buybacks could boost market sentiment, strengthen corporate fundamentals, and attract both domestic and foreign investors.

"We will review today’s discussions and assess the best asset allocation strategy," he concluded, stressing that buyback policies should not only be short-term but also part of a sustainable long-term approach to market resilience.

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