By Evan Andhika Suci – Ilmu Hubungan Internasional Semester 4

The Indonesia Stock Exchange (IDX) temporarily halted trading on Tuesday (18/03/2025) after the Indeks Harga Saham Gabungan (IHSG) or Indonesia Composite Index, plummeted 5 percent during the morning session–and was 6.12% down at 6.076.08 right before the market freeze.

The halt was triggered at 11:19:31 WIB time in accordance with IDX regulations, and resumed at 11:49:31 WIB.

The IHSG was down 3.82 percent to 6,220 in the early trading session, as a consequence of heavy losses in banking and large-cap stocks– such as Bank Central Asia (BBCA) which dropped 2.62 percent, Bank Mandiri (BMRI) fell 4.70 percent, Bank Rakyat Indonesia (BBRI) declined 3.66 percent, Petrosea (PTRO) plummeted 15.02 percent, and the LQ45 index–which is a market capitalization-weighted index that captures the performance of 45 most liquid companies listed on the Indonesia Stock Exchange, also weakened by 3.10 percent.

Analysts point to several factors for the trigger of this market drop, including mass layoffs in several industries ahead of the Eid holiday with significant job cuts at companies including PT Karya Mitra Budi Sentosa, which has laid off 10,000 employees, and PT Danbi Internasional, PT New Era, and PT Yihong Novatex, each cutting 2,000 jobs. And one of the most recent, PT Sri Rejeki Isman Tbk (Sritex), one of Southeast Asia’s largest integrated textile manufacturers, officially ceased operations on March 1, 2025, which led to the layoff of 10,965 workers.

“Over 60,000 people have lost their jobs, and this number is expected to reach hundreds of thousands in the coming months. This layoff crisis is very serious,” said KSPI President, Said Iqbal, in a press conference, as quoted by CNBC Indonesia.

He further states that the layoffs have primarily affected sectors such as textiles, garments, footwear, electronics, and automotive, as well as other labour-intensive industries.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, revealed that President Prabowo Subianto did not provide specific instructions regarding the stock market freeze or trading halt of the IHSG after it fell by 6.12%.

“There was no [direction given by Prabowo],” Airlangga said, as quoted by Bloomberg Technoz Jakarta.

Airlangga also gave a signal that Prabowo did not seem too worried about the condition of the stock market. As seen when he did not give a straightforward answer about whether Prabowo was paying special attention to the IHSG freeze.

Instead, he claimed that the stock market conditions does not translate proportionally to the national economic conditions. He stated that the stock market drop would not have a significant impact because the Indonesian economy has “strong fundamentals”, and several investor maneuvers and sentiments are often unproven.

“First, of course, our economic fundamentals are strong. Of course, some of the issues that have been developed are not true,” he said.

Airlangga also assessed that the decline in the JCI was quite common globally. He assessed that the market was indeed waiting for the results of the Federal Open Market Committee (FOMC) of the United States Central Bank (US), which would determine the benchmark interest rate or Fed Fund Rate (FFR).

In addition, Airlangga viewed that the market would also monitor the decision of the Bank Indonesia (BI) Board of Governors Meeting (RDG) which would be held on Wednesday (19/3/2025). Where the market would wait to see whether BI would cut its benchmark interest rate or still hold it.(tries)

Link Publish Medium.com ; https://medium.com/@andhikasuci/surprise-indonesia-market-freeze-d9d8f0639f4f