"Indonesian Stock Plunge Triggers Trading Halt on Economic Woes"

The Indonesian stock market has been on a rollercoaster ride, with recent geopolitical tensions in the Middle East causing significant volatility. The Jakarta Composite Index (JCI) has seen a sharp decline, dropping from 7,286 to 7,083 by the close of trading on Tuesday. This plunge has triggered a trading halt, raising concerns about the resilience of the Indonesian economy amidst global uncertainties.

The recent geopolitical tensions in the Middle East have had a significant impact on the Indonesian stock market. Following Iran's retaliatory strike on Israel, the Jakarta Composite Index declined from its pre-Eid level of 7,286 to 7,164 after Eid, and further down to 7,083 by the close of trading on Tuesday. This decline was accompanied by a plunge in the Indonesian Rupiah, reaching Rp 16,170 in the first trading session after the long Eid holiday. Piter Abdullah Redjalam, Executive Director of Segara Research Institute, noted that the weakening of the Rupiah aligns with the trend of declining currencies in emerging markets amidst peak global uncertainty.

The impact of these geopolitical tensions was not limited to the overall market but also affected specific sectors. Even stocks with strong fundamentals, which had risen since the end of 2023 and soared during February and March 2024, plummeted due to increasing uncertainty. This included large-cap non-bank stocks. For instance, Bank Central Asia's (BBCA) stock, which reached Rp 10,325 per share before the Eid holiday, fell to Rp 9,475 following Iran's strike on Israel on April 16 and hit a low of Rp 9,350 on April 22. Similar declines were seen in other bank stocks, such as state-owned Bank Mandiri. Despite these declines, the fundamentals of these banks remained strong in the first quarter of 2024. BBCA recorded a profit of Rp 12.9 trillion, up 11.7 percent year-on-year. Bank Mandiri also posted a profit of Rp 12.7 trillion (up 1.13 percent year-on-year), State-owned BRI reported a profit of Rp 15.88 trillion (up 2.45 percent year-on-year), and Bank BNI achieved a profit of Rp 5.33 trillion (up 2 percent year-on-year). This indicates that the drop in stock prices is entirely unrelated to the financial performance of the companies.

Similarly, the stocks of other non-bank issuers, such as state-owned telecommunications company Telkom, also came under pressure. In the first quarter of 2024, Telkom recorded revenue of Rp 37.4 trillion, growing 3.7 percent year-on-year. Telkom's EBITDA increased by 2.2 percent year-on-year to Rp 19.4 trillion, with net profits reaching Rp 6.1 trillion. Piter noted that Telkom's performance was supported by its subsidiaries. In the first quarter of 2024, Telkomsel remained the largest contributor to Telkom's revenue. According to Piter Abdullah, Telkom faces more challenging conditions in the telecommunications industry. "The telecommunications sector is undergoing a disruption process that demands a quick and precise response. Failure to formulate transformation steps can have fatal consequences for the company's continuity," he said.

Astra's (ASII) stock also dropped by 9.75 percent in trading on May 14. Year-to-date, the stock has plummeted by 19.65 percent. Astra's shares plummeted to their lowest level in the past year due to declining car sales. This shows that the manufacturing sector, particularly the automotive industry, is also vulnerable to these external shocks.

In summary, the sectors most vulnerable to these external shocks include banking, energy, manufacturing, and telecommunications. The impact of geopolitical tensions in the Middle East has caused a market crash, affecting not only mediocre stocks but also large-cap stocks that support the index across these sectors.



To gauge the resilience of the Indonesian economy amidst global uncertainties, investors should monitor several key economic indicators. These indicators provide insights into the country's economic health and its ability to withstand external shocks. Here are some of the key indicators and how they compare to historical data:

1. GDP Growth Rate:
- The GDP Growth Rate for December 2024 was 0.53%, which is significantly lower than the previous high of 5.05% in December 2024. This indicates a slowdown in economic activity, which could be a concern for investors. However, the Full Year GDP Growth for December 2024 was 5.03%, showing a more stable trend over the year.
- Historical data shows that the GDP Growth Rate has fluctuated between 3.69% in 2021 and 5.31% in 2022, indicating a generally positive trend despite recent slowdowns.

2. Inflation Rate:
- The Inflation Rate for February 2025 was -0.09%, which is lower than the previous high of 82.4% and the previous low of -1.17%. This suggests that inflation is under control, which is positive for economic stability.
- Historical data shows that the Inflation Rate has been relatively stable, with a high of 8.4% in 2013 and a low of 1.68% in 2020. The current rate is within a manageable range.

3. Unemployment Rate:
- The Unemployment Rate for September 2024 was 4.91%, which is higher than the previous low of 2% but lower than the previous high of 11.24%. This indicates a relatively stable labor market.
- Historical data shows that the Unemployment Rate has been decreasing, from 6.6% in 2011 to 4.8% in September 2024, indicating improving labor market conditions.

4. Interest Rate:
- The Interest Rate for February 2025 was 5.75%, which is lower than the previous high of 12.75% but higher than the previous low of 3.5%. This suggests that monetary policy is being used to manage economic conditions.
- Historical data shows that the Interest Rate has been relatively stable, with a high of 7.75% in 2014 and a low of 3.75% in 2020. The current rate is within a manageable range.

5. Balance of Trade:
- The Balance of Trade for February 2025 was 3,117 USD Million, which is lower than the previous high of 7,565 USD Million but higher than the previous low of -2,331 USD Million. This indicates a positive trade balance, which is beneficial for economic stability.
- Historical data shows that the Balance of Trade has been fluctuating, with a high of 2.9% of GDP in 2018 and a low of -3.3% of GDP in 2013. The current balance is within a positive range.

6. Current Account to GDP:
- The Current Account to GDP for December 2023 was -0.3%, which is lower than the previous high of 4.8% but higher than the previous low of -6.8%. This indicates a relatively stable current account position.
- Historical data shows that the Current Account to GDP has been fluctuating, with a high of 2.9% in 2018 and a low of -3.3% in 2013. The current position is within a manageable range.

7. Government Debt to GDP:
- The Government Debt to GDP for December 2023 was 39.3%, which is lower than the previous high of 87.43% but higher than the previous low of 23%. This indicates a manageable level of government debt.
- Historical data shows that the Government Debt to GDP has been increasing, from 23.1% in 2011 to 39.3% in December 2023, but it remains within a manageable range.

8. Business Confidence:
- The Business Confidence for December 2024 was 12.46, which is lower than the previous high of 21.99 but higher than the previous low of -35.75. This indicates a relatively stable level of business confidence.
- Historical data shows that Business Confidence has been fluctuating, with a high of 21.99 in December 2024 and a low of -35.75 in December 2024. The current level is within a stable range.

9. Manufacturing PMI:
- The Manufacturing PMI for February 2025 was 53.6, which is lower than the previous high of 57.2 but higher than the previous low of 27.5. This indicates a positive manufacturing sector outlook.
- Historical data shows that the Manufacturing PMI has been relatively