Core Viewpoint - Indonesia's stock market is experiencing a significant downturn, with the Jakarta Composite Index dropping nearly 5% as of February 2, following a dramatic decline of almost 16% over two days from January 28 to 29, resulting in a market value loss exceeding $80 billion [1][2]. Group 1: Market Performance - The Jakarta Composite Index faced its worst two-day drop since the 1998 Asian financial crisis, with a cumulative decline of nearly 16% [1]. - Over 200 stocks in the Jakarta Composite Index have a free float ratio of less than 15%, indicating a severe lack of liquidity for international investors [1]. Group 2: Regulatory Response - Indonesia's financial regulatory authority announced key reforms on January 29, doubling the minimum free float requirement for listed companies to 15% [3]. - The sovereign wealth fund Danantara was instructed to guide its asset management companies to buy stocks in an attempt to stabilize market sentiment [3]. Group 3: External Influences - The stock market's decline is exacerbated by falling commodity prices, with Indonesia's economy being highly sensitive to these fluctuations [2]. - MSCI issued a downgrade warning on January 27, citing fundamental investability issues in the Indonesian stock market, which triggered panic selling among international investors [1].

Group 1 - The Indonesian Financial Services Authority (OJK) executives collectively resigned due to the significant decline in the Jakarta Composite Index (JCI) [1] - The resignations were made to maintain market confidence, and a temporary governance mechanism has been initiated to ensure regulatory functions remain unaffected [1] - The President of the Indonesia Stock Exchange also resigned, hoping to improve the capital market conditions in Indonesia [1] Group 2 - MSCI announced a temporary freeze on the index compilation for Indonesian stocks due to ongoing concerns about the free float and overall market accessibility [2] - Foreign investors sold Indonesian stocks worth 62 trillion Indonesian Rupiah (approximately 3.71 billion USD), marking the largest sell-off since April 16 of the previous year [2] - The JCI index fell by 16% over two days, resulting in a market capitalization loss exceeding 80 billion USD, with two trading halts triggered [2] Group 3 - The OJK plans to increase the minimum free float requirement for listed companies from 7.5% to 15% for both new and existing listings [2] - Major international investment banks, including Goldman Sachs and UBS, have downgraded their ratings on the Indonesian stock market [2]