The Indonesia Composite Index (ICI) plunged by more than 9 percent on Tuesday (April 8, 2025), prompting the Indonesia Stock Exchange (IDX) to initiate a trading halt—temporarily suspending stock market activity. A similar halt was previously implemented on March 18, 2025. This measure is triggered when the ICI drops significantly.
Wayan Nuka Lantara, Ph.D., a lecturer at FEB UGM and an expert in investment, finance, and banking, described the situation as highly abnormal. He compared it to the extraordinary events during the global financial crisis of 2008.
As Head of the Management Study Program at FEB UGM, Wayan explained that the sharp drop in the ICI was driven by widespread panic selling. This reflected a broader decline in investor confidence in Indonesia’s stock market. “This indicates that either foreign investors, domestic investors, or both believe holding onto shares is no longer promising, and are choosing to sell off quickly,” he said during a press interview on Wednesday (April 9, 2025) at FEB UGM.
According to Wayan, Indonesia is particularly vulnerable because its economic fundamentals are weaker than those of other ASEAN nations. Various unresolved issues are fueling uncertainty, which further undermines investor trust. Additionally, the new president has introduced policies whose implementation and potential benefits are still unclear.
“As a result, already negative regional sentiment is perceived even more pessimistically in Indonesia,” he explained.
Wayan supported the IDX’s decision to impose a 30-minute trading halt, calling it a timely response to help stabilize the market. The pause, he said, serves as a preventive measure to allow investors time to think more rationally and avoid emotionally driven decisions.
“It functions as a cooling-off period, giving everyone a moment to reflect on what’s happening,” Wayan added.
The IDX enforces a trading halt when the ICI drops by 8 percent. If the decline continues, the halt may be repeated. Under extreme conditions, if the ICI falls by 20 percent, the exchange can suspend trading entirely.
Wayan also stressed the importance of adopting a long-term investment strategy, especially in uncertain times. However, he advised beginners to approach their first investments with careful consideration and thorough understanding.
“There’s no such thing as a completely safe investment, but stocks can still be a good option—if they’re backed by strong fundamentals,” he noted.
He highlighted the need for caution, emphasizing that the pursuit of high returns shouldn’t come at the cost of sound judgment. Investors, he said, must be strategic in allocating their funds—not just choosing investment instruments, but also selecting stocks with solid fundamentals, promising prospects, and undervalued pricing.
In addition to stocks, other investment options like bitcoin and gold remain relevant. However, Wayan warned that market volatility can strike at any time. “Even gold, often seen as a safe haven, can lose value. Bitcoin, too, is highly volatile,” he said.
Still, he affirmed that investing remains essential for building long-term financial security. “It’s the only way to create a financial ‘lifeboat’ for the future. Especially if this trade war continues, we’ll need that kind of protection,” he concluded.
Report: Shofi Hawa Anjani
Editor: Kurnia Ekaptiningrum
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