Indonesian stocks slid, sending the benchmark index to a three-month low as speculation that some of the country’s largest-listed companies could face regulatory fines rattled sentiment.
The Jakarta Composite Index slumped as much as 2.9%, the most since June 30. Shares of PT Dian Swastatika Sentosa and PT Barito Renewables Energy tumbled more than 14% each to be the biggest drags on the benchmark. The energy sector was the worst performing among the index’s subgauges.
The selloff followed speculation sparked by an unconfirmed report from local news outlet Kontan and social media posts that the securities regulator could soon announce the results of an investigation into several coal and renewable-energy firms, with fines potentially reaching hundreds of billions of rupiah.
The regulator could not immediately be reached for comment.
“Those rumors partially drove negative sentiment among domestic retail investors,” said Aldo Perkasa, head of research at PT Trimegah Sekuritas Indonesia.
Investor confidence has remained weak ahead of MSCI Inc.’s review of the country’s market status next month, with foreign funds selling local stocks on a net basis in each of the last five weeks. Down more than 31% this year, the JCI remains the world’s worst-performing equity gauge.
Traders also cited the risk of another delay from the index compiler, prolonging uncertainty hanging over the market. In a note published Monday, PT Mirae Asset Sekuritas Indonesia said that it now expects the monitoring period for regulatory reforms to be extended, with a resolution potentially deferred until May.