Indonesia’s Confusing Economic Turn 
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Indonesia continues to notch one grim milestone after another. The latest: losing its status as Southeast Asia’s largest stock market to Singapore.
The total market capitalisation of Indonesian-listed companies has fallen well over 30 per cent from a peak in January to US$618 billion, while Singapore’s has climbed to US$645 billion, according to data compiled by Bloomberg.
Investor sentiment in Indonesia has increasingly soured in recent months amid uncertainties over a potential equities reclassification to frontier markets, as well as Fitch Ratings and Moody’s Ratings both cutting their credit rating outlooks to negative. Its stock benchmark sits at the bottom among global peers while the rupiah has touched a succession of record lows.
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The momentum may not be in Indonesia’s favour at the moment, said Soh Chih Kai, a portfolio manager at Lion Global Investors. Still, a revival in the future should not be ruled out, he said.
“Nevertheless, this reinforces the relative standing of the Singapore market as capital flows continue to reward certainty amid global policy uncertainty,” Soh said.
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Singapore equities have benefited from economic and political stability, as well as government-led market reforms. The Straits Times Index climbed to a record this week as investors sought defensive havens during volatility sparked by the Iran war.
The island nation’s stocks are on pace to outperform their Indonesian peers by the most on record in 2026.
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