Jakarta. Investment Minister Rosan Roeslani on Sunday urged capital market authorities to accelerate reform efforts following a week of turbulence that sent Indonesia’s benchmark stock index down nearly 7% and erased Rp 1,198 trillion ($71 billion) in market capitalization at the Indonesia Stock Exchange (IDX).

The sell-off reduced total market capitalization to Rp 15,046 trillion ($896 billion) and was triggered by criticism from global index provider MSCI Inc, which flagged limited transparency and the risk of coordinated transactions in Indonesia’s equity market.

“This is a very good moment to improve the quality, transparency, and accountability of our stock exchange,” Rosan said during a meeting with market participants and regulators in Jakarta. “This should have been done long ago, but now is the time to accelerate.”

Rosan stressed that the capital market plays a strategic role in driving investment, which contributes around 29% to Indonesia’s economic growth, while household consumption accounts for roughly 54%.

“Our capital market is large in scale, so it must provide long-term confidence for investors, and its sustainability must be safeguarded,” he said.

He stressed that healthy stock price formation must be driven purely by fair market mechanisms, reflecting genuine supply and demand. According to Rosan, capital market development should not be measured solely by capitalization and trading value, but by market quality — including the integrity of price discovery, liquidity, and strong governance.

“As long as price formation is correct and healthy, liquidity will not be an issue,” he said. “Domestic and foreign investors will feel secure because they know they can enter and exit the market fairly.”

Rosan underlined the critical role of capital market authorities, including the IDX and the Financial Services Authority (OJK), as well as other supervisory institutions. He said state-owned enterprises, which account for nearly 30% of total market capitalization, fully support the reform agenda being prepared by the OJK.

“We in the state-owned enterprise sector have a major stake in this,” Rosan said. “That is why we fully support the initiatives that will be launched soon. These reforms will strengthen investor confidence, both domestically and internationally.”

Rosan, who also serves as chief executive of sovereign wealth fund Danantara, which manages assets and investment decisions of state-owned companies, said rising retail investor participation and growing market capitalization show Indonesia’s capital market still has substantial room to expand — provided governance continues to improve.

He concluded by urging the industry to view the current volatility not as a setback, but as an opportunity to build a stronger foundation.

“I am confident these steps will generate greater belief and confidence in our capital market going forward,” Rosan said.

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