OJK: Domestic Buybacks, Retail Drove IHSG's 4.9% Weekly Rebound

Indonesia's benchmark stock index, the IHSG, closed at 5,439 on Friday, October 23, 2026, up from 5,185 the previous Friday. That marks a 4.9% gain for the week of October 19-23, according to data from the Indonesia Stock Exchange (IDX).

The rally came even as foreign investors posted net selling of Rp1.28 trillion on that Friday alone. Cumulative foreign net selling for 2026 has now reached Rp94.87 trillion.

Domestic buying carries the market

OJK Chief Commissioner Friderica Widyasari Dewi attributes the rebound to domestic forces. In a written statement through Bakom on Sunday, October 25, she credited share buybacks by listed companies and retail investor activity as the two main drivers.

"Thank God our market has rebounded. This is domestic strength, because foreigners are still net sellers. So this is domestic strength doing buybacks and our retail investors who are also extraordinary," Friderica said.

A buyback is when a company repurchases its own shares from the market, typically to cushion price declines or signal management's confidence in valuation. When multiple large issuers do this simultaneously, it can offset selling pressure from other parties, including foreign funds.

Still, Friderica cautioned that a single week of gains doesn't fully reflect the market's overall resilience. Trading transparency, disclosure of share ownership, and consistent law enforcement remain areas of focus, especially amid MSCI's ongoing review of Indonesia's market.

Corporate fundamentals: 74% of issuers profitable

Beyond fund flows, OJK also presented corporate performance data. Listed companies' revenue grew 15.9% in the second quarter of 2026, accompanied by net profit growth.

Out of 962 companies listed on the IDX, 74% posted a profit. "Of the total 962 issuers listed on Indonesia's capital market, 74% recorded profits. The fundamentals of the economy and of companies listed on Indonesia's capital market are very strong," Friderica said.

She said this performance has been one of the pillars supporting the market amid external pressure, including the ongoing foreign capital outflow. However, she stressed that strong fundamentals need to be matched with information disclosure and governance to maintain investor trust.

MSCI review: positive on 16 of 18 indicators

One issue closely watched by market participants is MSCI's evaluation of Indonesia's capital market classification. MSCI is a global index provider whose assessments influence how institutional investors worldwide allocate funds to a country, including whether it's classified as an emerging or secondary market.

Friderica referenced MSCI's June 2026 report, saying Indonesia received positive ratings on 16 out of 18 indicators compared with other emerging markets. "We see that their general review in June said that Indonesia, 16 out of 18 indicators compared with emerging market countries, we are very positive," she said.

She highlighted several specific indicators where Indonesia scores well. First, the share ownership disclosure threshold in Indonesia is set at 1%, far lower than many other markets that only require disclosure above 5%. A lower threshold means more transparent ownership information for investors.

Second, Indonesia has 39 investor classification types, which Friderica said provides a more granular picture of investor structure compared with other countries that lack such detail. Third, initial capital offering requirements in Indonesia range between 15% and 25%.

Rp1.5 trillion in sanctions, two manipulation cases

On the enforcement side, OJK reported it has imposed Rp1.5 trillion in sanctions on parties involved in capital market violations. The regulator also identified two companies suspected of market manipulation, with case handling carried out through inter-agency coordination.

OJK said it will continue reforming the capital market to strengthen transparency, liquidity, and investor confidence, partly in response to MSCI's attention to Indonesia's market quality. "We will keep monitoring, we will keep making improvements so our market becomes more credible, more liquid, more transparent, and can become a home for our people's investments going forward," Friderica said.

What it means for investors

Retail and local institutional investors should watch a few things from this report. First, foreign net selling, which has reached Rp94.87 trillion so far in 2026, is still ongoing, meaning the current rebound depends on continued buyback activity and retail buying interest.

Second, track issuers currently conducting or completing buybacks, since these actions can affect outstanding share supply and short-term sentiment. Third, keep an eye on MSCI's evaluation progress, as the classification outcome can influence how global institutional funds allocate capital to IDX-listed stocks.

Fourth, the 15.9% revenue growth figure for Q2 2026 and the 74% profitability rate among 962 listed companies can serve as reference points when assessing valuations in specific sectors. Finally, monitor developments in the handling of the two companies suspected of market manipulation, since that relates directly to the credibility of exchange transactions.