January 8, 2026 | 09:09 pm
TEMPO.CO, Jakarta - A senior researcher at the Center for Strategic and International Studies (CSIS) Department of Economics, Deni Friawan, warned of a bubble risk behind the strengthening Composite Index (IHSG). This statement responds to Finance Minister Purbaya Yudhi Sadewa’s belief that the IHSG could reach 10,000 this year.
According to Deni, the current strengthening of the IHSG is not driven by stocks with strong fundamentals, such as major banks or main consumer emitters. Instead, the index increase is largely supported by shares of new companies with very high valuations.
"[Stocks] that are gaining are mostly not companies with good fundamentals. I mean, for example, not Bank BCA, BRI, Bank Mandiri, or Indofood or ICBP; in general, these are new companies, some even have a Price to Earnings Ratio of up to 500 times," Deni said in a press conference on Wednesday, January 8, 2026, as reported by Antara.
This is evident as stock price increases do not align with the performance and fundamentals of listed companies. Consequently, Deni argued the IHSG rally resembles a bubble rather than a reflection of national economic strength.
This bubble formation carries a risk of a boom-and-bust cycle. When market expectations no longer align with company performance, sharp corrections are likely to occur, triggering turmoil in financial markets.
He also considered that this narrative potentially contradicts government concerns regarding stock manipulation that exchange authorities should monitor. "In my opinion, this is something that needs to be closely watched. We shouldn't let practices like this create something that is artificial," Deni said.
Deni also highlighted that the IHSG movement does not align with the rupiah exchange rate. This indicates the increase is driven more by domestic activities than foreign capital inflows. "But it's mostly domestic [activities] that are manipulating [stocks]," he said. As a result, CSIS considers supervision of market structure and the quality of the index to be a key to maintaining future financial stability.
Previously, Finance Minister Purbaya Yudhi Sadewa expressed optimism that the IHSG would reach 10,000 in 2026. He believed synchronized government policies and better economic prospects would accelerate the increase.
Purbaya even believed the index would soar above that figure by the end of 2026. "Next year (IHSG) 10,000? Oh, more. Over 10,000 by the end of next year," he told the media at the Ministry of Finance office, Jakarta, on December 31, 2025.
Previously, the state treasurer predicted the IHSG would surpass 9,000 at the end of 2025. At the close of trading on Tuesday, December 30, 2025, the IHSG stood at 8,646.94, up 0.031 percent or 2.68 points. Despite missing his projection, Purbaya stated the difference was minimal and believed the index could still rise higher.
Read: Purbaya Issues New Rules to Monitor Taxpayer Compliance
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