In October, there has been a rapid withdrawal of foreign investors from the Indonesian stock market due to concerns related to global economic instability and conflicts in the Middle East.
As a result, the Composite Stock Price Index (IHSG) for the month has declined. Data from the Indonesia Stock Exchange (BEI) as of October 27, 2023, indicates that foreign investors have sold off a net amount of IDR 5.83 trillion worth of investments, which is nearly IDR 6 trillion across all markets in the past month.
Net sales target banks
Among the assets that foreign investors have been selling in the past month, three major banks were targeted.
For example, the shares of PT Bank Rakyat Indonesia (Persero) Tbk (BBRI) saw a net sale of IDR 2.6 trillion over the past month.
Similarly, shares of PT Bank Central Asia Tbk (BBCA) experienced a net sale of IDR 1.6 trillion, and PT Bank Mandiri (Persero) Tbk (BMRI) recorded a net sale of IDR 967.8 billion.
These three banks, which have significant market capitalization, also witnessed a decrease in their stock prices during the month. BBRI’s shares fell by 4.3%, BBCA’s by 1.1%, and BMRI’s by 4.6% during this period.
GoJek shares price drops
Additionally, the shares of the e-commerce and ride-hailing company PT GoTo Gojek Tokopedia Tbk (GOTO) also experienced a net sale of IDR 763.8 billion. GOTO’s stock price dropped by 31.03% over the month, making it the largest contributor to the 58-point decrease in the IHSG for October.
This October, the extent of foreign selling activity is the most substantial since August 2023, when foreign investors recorded net sales of IDR 20.10 trillion across all markets.
This marks the fifth consecutive month of foreign investors pulling out of the stock market in 2023. Moreover, when comparing monthly data, foreign investors have been exiting more frequently in 2023 compared to 2022 (four times) and 2021 (three times). In the past four years, it was only in 2020, during the Covid-19 pandemic, that foreign investors withdrew from the Indonesian market, and that lasted for nine months.