Do read my own Conclusions at the end.
First here is a one minute video about Indonesian students in Kalimantan protesting against the indiscriminate burning of the forests. There were similar protests in Jakarta and other parts of Indonesia. (Folks, as Malaysians we need to get to know Indonesia in some detail. They are our closest neighbours in all aspects of the word).
Note that the students are saying 'Revolusi'. Their country is failing - again.
The Indonesian Stock Market has crashed. It did not happen overnite. It has been crashing this whole year (see chart below). Their composite stock market index (IHDN or Indeks Harga Saham Gabungan) has dropped 45% from 9,134 points in January 2026 to 4996 points on 19 October 2026.
The Indonesian Rupiah has weakened from Rp16,801.08 (27 Feb 2026) to Rp18,089.73 (23 Oct 2026) per US$1, a 7.67% depreciation against the US dollar. Graph below.
Some brief copy paste.
Indonesia’s Stock Market Crisis: Regulatory Weakness, Political Influence and the Risk of Systemic Corruption
1. Market crash that exposes deeper problems
At the heart of the issue are the credibility of financial regulation, the transparency of listed companies, the relationship between political power and capital allocation, and the independence of institutions responsible for protecting investors.
The weaknesses have accumulated over years: inadequate market surveillance, concentrated corporate ownership, conflicts of interest, inconsistent enforcement and insufficient transparency.
2. What actually happened?
On Friday, 16 October 2026, Indonesia’s Jakarta Composite Index (IHSG) fell 11.57%, closing at 5,185.10. Reuters reported that it was the market’s steepest single-day decline since January 1998.
3. Regulatory weakness: The problem of enforcement
Indonesia has formal financial regulators, including the Financial Services Authority (OJK), alongside the Indonesia Stock Exchange and the central bank. The existence of these institutions, however, does not automatically guarantee effective surveillance or deterrence. (AKA: Korupsi and rasuah)
Regulators cannot or will not identify manipulation quickly, establish who controls apparently independent shareholders, trace coordinated transactions and impose penalties strong enough to discourage misconduct.
Controlling shareholders, nominees or related parties are difficult to identify, the reported free float may overstate the shares genuinely available for independent trading.
Weak deterrence. Manipulation is detected only after prices have risen sharply or investors have suffered losses.
Unequal access to information. Investors who obtain information earlier or understand opaque ownership networks may enjoy advantages over ordinary domestic and foreign shareholders.
That is the fundamental institutional test: regulation must work in practice, not simply appear in announcements and policy documents.
4. “Gorengan” stocks and the potential for market manipulation
The Indonesian term saham gorengan refers to shares whose prices may be artificially inflated through speculative promotion, coordinated trading or manipulation.
Imagine a company in which a small group controls most shares, leaving relatively few available for trading. Aggressive buying can push the quoted price upwards without a corresponding improvement in earnings or business prospects. Retail investors may mistake rising prices for evidence of genuine value and buy near the peak. When major holders sell, the price collapse. Small investors get taken for a ride.
5. Corruption and political influence: The deeper institutional risk
Corruption is an important concern in Indonesia’s political economy. Concerns about transparency, market integrity and governance.
The deeper risk is institutional capture: a situation in which regulatory or economic decisions become more responsive to powerful political and commercial interests than to the public interest.
Indonesia’s economy has long featured powerful business groups, influential political networks and companies with close connections to the state. Where ownership is concentrated, conflicts of interest can become difficult for outside investors to assess.
My Comments:
Indonesia is a Third World country where value systems, integrity and even morality is still Work In Progress. Exactly like in this country but over here the 'lacks-thereof' can be broadly isolated into certain groups. It is not across the board.
So in Third World countries when there are electricity power supply cables running across towns and villages, the villagers who have the smarts not to get electrocuted often steal free electricity by tapping the power cables.
Or if they know how to operate drills and weld metal they drill holes in water pipes to steal water.
In Nigeria, people drilled holes in oil pipelines to steal diesel and petrol. Once in a while there would be a fire and the whole village would get toasted.
Indonesia is a bit more sophisticated in some ways. They have a stock market. And the local boys have become savvy at playing the markets (aka manipulating). But they are extremely short on the integrity, values and morality department. Much like the folks here as well. So their system is constantly collapsing.
And at the head of the pack is the Bapak Presiden - a rather clownish fellow but with serious power at his disposal. He is the president.
Here is the bottom line - Indonesia will not reform anytime soon. The fires and the haze will return again next year. Just wait until July next year.
Their stock market and the Rupiah will keep going down or sideways.
They have laws but their laws need not apply. Or apply equally. Does that sound familiar?
They have systems but their systems need not follow the system. It can be bengkok. Does that sound familiar?
What is needed are good values, good morality and integrity in the people. Which are lacking. Does that sound familiar?
Never take things for granted. Things can go from bright sunshine to disaster in the blink of an eye.
