Economist: Prabowo’s Speech Isn’t Behind IHSG’s Drop

JAKARTA — The Composite Stock Price Index (IHSG) has recently experienced fluctuations that have sparked speculation among capital market players. Many had linked the index’s weaker performance to President Prabowo Subianto’s speech. However, that view has been strongly rejected by economists.

Economist Surya Vandiantara of Universitas Muhammadiyah Bengkulu said the narrative connecting the president’s communication policy to the IHSG’s weakness is highly inaccurate. In theory, the movement of the domestic stock market is more strongly influenced by company fundamentals, not merely by reactions to political rhetoric.

Fundamentals Are the Main Driver

Surya explained that the performance of listed companies is the main anchor maintaining market stability. If the majority of major companies listed on the Indonesia Stock Exchange record lower revenue or losses, then a decline in the IHSG is a logical consequence that cannot be avoided. The capital market always reflects the financial health of the listed issuers within it.

“If the performance of companies listed on the exchange is mostly declining in terms of revenue or loss-making, then it is only natural for the IHSG value to fall as well,” Surya said in an official statement in Jakarta on Saturday.

However, the current phenomenon shows a fairly strange anomaly. On one hand, Indonesia’s macroeconomic indicators tend to be positive and the performance of issuers is relatively stable. So why is the market still weakening? Surya suspects interference by certain parties with agendas outside pure economic interests.

Alleged Irrational Investor Action

The emergence of a narrative that widely blames the president’s speech is suspected by Surya to be a tactic used by a small number of rogue investors. This irrational behavior is allegedly being played up deliberately to create baseless negative sentiment, thereby discrediting the government’s position in the eyes of both global and domestic market players.

This speculative action not only undermines a healthy market mechanism, but also damages the trust of investors who properly conduct fundamental analysis. For retail investors, this situation is a reminder to remain cautious when making investment decisions.

As for the real impact on the public, people need to understand that manipulation of sentiment on the exchange can cause price volatility that does not reflect a company’s true value. When the market moves based on political rumors rather than performance data, individual investors who are not quick to read the pattern are often the ones most financially harmed.

Need for Firm Regulators

To safeguard the integrity of the national stock exchange, Surya urged the government not to remain silent in the face of distorted market behavior. Firm action against parties proven to manipulate or spread irrational sentiment with political motives is a crucial step to protect the public interest.

A healthy capital market requires transparency and legal certainty. Without strong supervisory intervention, misleading narratives risk recurring every time a political moment arises. At present, market participants should refocus on economic fundamentals such as interest rate trends, inflation, and issuers’ financial reports, which will determine the market’s direction going forward.

Data from the Indonesia Stock Exchange does record fairly sharp daily movements. However, linking every drop in value to a single speech variable without considering global liquidity conditions and banking sector movements is a mistake in reading the real map of Indonesia’s economy.