Indonesia’s capital market saw foreign fund outflows accelerate in March, with IDR 23.34 trillion, highlighting a strong growth of domestic investors.
The shift reverses a net inflow of IDR 360 billion in the month prior, reflecting rising global risk aversion, driven primarily by escalating tensions in the Middle East.
According to the Financial Services Authority (OJK), a significant portion of the sell-off occurred through negotiated market transactions, typically associated with large institutional investors executing block trades outside the regular trading board.
The number of domestic investors grew by 1.78 million in just one month, bringing the total number of investors in Indonesia to 24.74 million.
Further, considering the standard frameworks used by OJK and the World Federation of Exchanges (WFE), several key indicators are used to assess the resilience of Indonesia’s stock market:
- Net foreign flow: tracks the balance of international capital to measure global investor confidence
- Negotiated market transactions: monitors large institutional trades conducted outside the regular trading board
- Market liquidity ratio: measures how easily assets can be sold without causing major price disruption
Domestic participation growth: assesses the strength of the local market through the growth of its investor base
These suggests that while the countryb remains exposed to global shocks, its growing domestic investor base is increasingly capable of mitigating volatility.
