When the IHSG Falls, Communication Becomes Policy

Indonesia’s capital market is clearly under pressure.

We all witnessed how the IHSG plunged by nearly 8 percent, triggering trading halts on two consecutive days, from 8,980 to 8,261 on Wednesday (Jan 28), followed by a further drop to around 7,654 on Thursday morning (Jan 29). These were not merely red numbers on a screen. They were psychological alarms that shook retail investors, institutional players, and the broader economic ecosystem.

From a technical standpoint, there are many contributing factors:

• MSCI’s freeze and concerns over a potential downgrade of Indonesia from Emerging Market to Frontier Market, unsettling foreign investors
• Profit taking in stocks that had rallied excessively
• Capital outflows
• Unfavorable global sentiment
• Fiscal concerns related to the state budget deficit

All valid. All rational.

But from a human and communication perspective, there is a deeper issue that often gets overlooked.

Imagine this. At the very moment the market is halted and confidence is fragile, the leaders expected to hold the line choose to step aside. What happens next? The market falls further.

This is precisely what occurred when the President Director of the Indonesia Stock Exchange, Iman Rachman, and the Chairman of the OJK, Mahendra Siregar, stepped down amid market turbulence. For many market participants, the immediate reaction was intuitive.

If those in command are changing, who is stabilizing the situation?

Resignation is, of course, a legitimate organizational decision and can be a form of responsibility. But in a highly sensitive environment, leadership transitions without strong, proactive narrative control create a vacuum. That vacuum is quickly filled with anxiety.

Retail investors, in particular, tend to interpret such moments emotionally.

If they resign, something must be seriously wrong.

In reality, the decision was taken as part of efforts to restore stability in the capital market and financial services sector. But perception often outweighs explanation when communication comes late or lacks clarity.

Optimistic statements from figures such as OJK officials, the Ministry of Finance, and other authorities are certainly helpful. They matter. They help slow panic.

However, markets do not respond to optimism alone. They respond to clarity.

Optimism based on what?

What are the short-term measures?

Who is in charge right now?

How are risks being contained?

The market’s continued weakness through February 4, when the IHSG fell another 0.66 percent from its opening level of 8,123, suggests that reassurance without structure is insufficient.

We often reduce markets to numbers. Indices up or down. Red or green charts. Numbers speak to logic. But market decisions are never purely logical. They are emotional.

Certainty of policy direction.

Clarity of leadership.

Confidence in risk management.

These are the elements that shape sentiment, trust, and a sense of safety.

Simply saying, “Indonesia’s economy is strong, there’s no need to worry,” is not enough.

That is why, in times of market volatility, calm, clear, and consistent communication is not a supporting act. It is as critical as policy itself.