Shares in all 11 of Indonesia's large and mid-sized listed banks rose in early trade on October 20, led by a 13.18% surge in PT Bank Permata (IDX: BNLI) to IDR1,760 ($0.11), CNBC Indonesia reports.
The gains came as the Jakarta Composite Index (IHSG) reversed course after shedding 946 points, or 15.93%, across the three previous sessions. The sell-off began after MSCI said last week that it could downgrade Indonesia from emerging market to standalone market status. Large lenders carry the heaviest weightings in the index and are popular with foreign investors, so their moves often determine where the benchmark goes.
The state-controlled lenders posted strong gains. Bank Mandiri climbed 6.55% to IDR3,580 ($0.19), Bank Rakyat Indonesia added 6.30% to IDR2,700 and Bank Negara Indonesia gained 5.41% to IDR3,120. Bank Central Asia, the country's largest private lender, advanced 4.25% to IDR5,025, moving back above the psychological IDR5,000 mark.
Among other state banks, Bank Tabungan Negara jumped 7.06% to IDR910, while Bank Syariah Indonesia rose 3.43% to IDR1,055, according to Stockbit data as of 09:12 local time.
The index opened 0.33% lower at 4,980.16. Roughly ten minutes into the session, it turned and climbed by more than 2%, touching an early high of 5,129.
Buyback announcements from several listed companies helped drive the recovery. Self-regulatory organisations, regulators and the government also pledged jointly to address problems in the capital market.
The Indonesia Stock Exchange said it would include information on affiliate relationships when it publishes shareholdings above 1%. The bourse also plans to remove stocks classed as having High Shareholding Concentration from the index calculation.
Danantara, the state investment agency, said it was prepared to raise its stakes in state-owned companies with sound fundamentals, a move that gave state banks a further lift. President Prabowo Subianto separately called on the Financial Services Authority (OJK) to take firm action against capital market violations, singling out coordinated trading.