Indonesia's Composite Stock Price Index (IHSG) plunged up to 16 percent on January 28 and 29, 2026, due to MSCI's assessment of market transparency. Police are now investigating criminal indications related to stock manipulation, while five top officials from BEI and OJK resigned as a moral responsibility. A temporary recovery was seen in Friday's close, though turmoil is projected to continue.
Background of the IHSG Decline
On Wednesday (January 28, 2026) and Thursday (January 29, 2026), Indonesia's Composite Stock Price Index (IHSG) experienced a sharp drop of up to 16 percent, triggered by Morgan Stanley Capital International (MSCI)'s announcement on the review and rebalancing of Indonesian stocks. MSCI's assessment highlighted issues with transparency in share ownership structures and low free float levels among issuers, seen as exposing stock price manipulation practices. As a result, the Indonesia Stock Exchange (BEI) imposed trading halts twice in a row after the IHSG fell to 8 percent.
The IHSG closed down 659.67 points or 7.35 percent at 8,320.55, while the LQ45 index also declined. Finance Minister Purbaya Yudhi Sadewa described it as a "temporary shock," confident that companies would meet MSCI criteria for global foreign investment.
Police Investigation into Criminal Aspects
The Directorate of Special Economic Crimes (Dittipideksus) at Bareskrim Polri will delve into criminal indications related to 'saham gorengan' (manipulated stocks). "Certainly (we will investigate). Currently, Dittipideksus investigators are conducting investigations and prosecutions on several similar cases," said Director Brig. Gen. Ade Safri Simanjuntak in Jakarta on Friday (January 31, 2026).
For instance, a prior case involved Director of PT Multi Makmur Lemindo Junaedi and former BEI officer Mugi Bayu, convicted under the Capital Markets Law jo. Criminal Code with sentences of 1 year and 4 months imprisonment and fines of Rp2 billion each.
Resignations from BEI and OJK Officials
The turmoil peaked with five top officials resigning on Friday (January 30, 2026). BEI CEO Iman Rachman stepped down in the morning, followed by OJK Commissioner Chairman Mahendra Siregar, Head of Capital Market Supervision OJK Inarno Djajadi, Deputy Commissioner I.B. Aditya Jayaantara, and OJK Vice Chairman Mirza Adityaswara. Mahendra Siregar stated this as a "form of moral responsibility to support recovery."
OJK assured that Mirza's resignation would not affect regulatory duties, with interim execution per regulations. Analyst Ibrahim Assuaibi projected another trading halt on Monday (February 2, 2026) due to Goldman Sachs' downgrade to underweight, similar to MSCI, and potential fund outflows of 2.2-7.8 billion USD.
On Friday afternoon, the IHSG recovered, gaining 97.41 points or 1.18 percent to close at 8,329.61, despite weakness in Asian markets.
