Indonesian stocks fall on tightened commodity export controls
Published Wed, May 20, 2026 · 01:01 PM — Updated Wed, May 20, 2026 · 02:18 PM
[JAKARTA] Indonesian stocks fell during choppy trading on Wednesday (May 20) after President Prabowo Subianto’s plan to tighten oversight of commodity exports fuelled concern about greater state control and weaker profitability in a key industry.
The benchmark Jakarta Composite Index (JCI) dropped as much as 2.4 per cent, with energy and basic materials firms leading declines. Stocks swung between gains and losses through the morning, as optimism over potential positive fiscal news was overshadowed by Prabowo’s confirmation that future sales of commodities will be routed through a state-owned firm.
Wednesday’s market volatility comes after a sell-off in assets just a day earlier when speculation grew about the formation of a special agency to oversee exports, including coal, crude palm oil and minerals, in a bid to support the currency.
In his speech to Parliament, Prabowo said that there was under-invoicing and under-accounting in exports, which caused hundreds of billions of US dollars in losses.
Indonesia’s assets have remained under pressure this year as fiscal discipline concerns compound risks of an MSCI market reclassification and a potential credit rating downgrade. While the new commodity export plan would bolster government finances amid deficit worries, investors warned it could ultimately undermine decades of market-oriented reforms.
“The market is still in a broader downtrend phase,” as selling ahead of index rebalancing has not yet settled, said Herditya Wicaksana, an analyst at MNC Sekuritas in Jakarta. “There are still no sufficiently strong positive catalysts to support a more sustainable upside for the JCI, both from the global and Indonesia side.”
Down about 27 per cent this year, Indonesian shares are the world’s worst-performing globally and its market has now been overtaken by Singapore as South-east Asia’s largest. The rupiah, which erased earlier losses on Wednesday, has hit successive record lows since the start of the Iran war, a growing risk to authorities seeking to stabilise markets amid high oil prices.
Against that backdrop, the finance ministry has said that it started buying back government bonds since last Wednesday to anchor yields and restore credibility to the market. Yields on the 10-year bond gained three basis points to nearly 6.8 per cent. BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
