Increased Stock Market Capitalization Signals Investor Confidence Recovery

President Prabowo Subianto, in one year of his government's performance, is trying to restore investor confidence in the financial market. The reason is that in just 6 months the stock price index and market capitalization fell quite deeply. Recovery gradually occurred leading up to one year of government.

Gianie
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2 Minutes
By: Gianie
Increased Stock Market Capitalization Signals Investor Confidence Recovery

After experiencing a decline in performance for almost a year, the Indonesian stock market is showing its strength again. The value of stock market capitalization on the Indonesia Stock Exchange (IDX) had shrunk to IDR 10,270 trillion when the composite stock price index (JCI) fell to 5,967.99 on 8 April 2025. Slowly, the Indonesian stock market rebounded and now the market capitalization value has reached more than IDR 15,000 trillion, with the JCI level above 8,200.

Ahead of the inauguration of the new Indonesian government last October, the Indonesian stock market corrected its performance which was affected by global economic uncertainty. JCI touched the highest level in 2024 with 7,905.39 and market capitalization reached IDR 13,468 trillion (19 September 2024).

However, after that the performance indicator on the trading floor slowly declined and reached its lowest point on April 8, 2025 with a JCI level of 5,967.99. The market capitalization value at that time was worth IDR 10,270.67 or a 23.7% decrease compared to when the JCI was at its highest in 2024.

It took about four months for the JCI performance to recover to its 2024 high. On August 1, 2025, the JCI reached a level of 7,464.65 with a market capitalization value of IDR 13,579.81 trillion.

Not waiting too long, the market capitalization value reached Rp 15,000 trillion on October 3, 2025 with the JCI level at 8,118.30. At the close of trading last Friday (10/10/2025), JCI recorded the highest figure of 8,257.85 with a market capitalization value of Rp 15,588.16 trillion.

The market capitalization figure is up 51.77% compared to the lowest performance of the Indonesian stock exchange in April. The improvement, which took about a year, shows that investor confidence has started to recover in the performance of the government. Especially the government's performance in managing the state budget and facing global pressures regarding reciprocal tariffs applied by the US government.

The capitalization value of the Indonesian stock market during the year increased by 25.13%, from IDR 12,457.73 (January) to IDR 15,588.16 trillion (October). The number of investors registered with the IDX during the year also increased by 18.85%, from 15.16 million investors with Single Investor Identification (SID) in January 2025 to 18.02 million SID investors (August).

This momentum of restoring investor confidence needs to be maintained so that the dynamics of the financial markets related to the performance of large companies in the country can encourage higher economic growth.

Data News Capital Market

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