IHSG at 8,000? It's Just a Number! Here's what really matters...
The IHSG finally broke through the psychological 8,000 level in mid-August 2025. An achievement that on one hand inspires optimism, but on the other raises new questions: does this number truly reflect the fundamental strength of the market?
Conglomerates as the Main Driver
The IHSG rally from its low of ~5,800 in April 2025 to its current level has been largely supported by shares of large conglomerates. If 14 conglomerate shares are excluded, the IHSG gap could be as much as ~25% lower. In other words, the index performance does not fully reflect the average condition of shares on the exchange.
Valuation: Cheap or Expensive?
Looking at the IHSG's P/E (forward 1Y), the market appears cheap — even equivalent to 2020 pandemic levels. However, when we zoom in on the 25 largest shares, a different story emerges. The P/B and P/E of this share group actually look premium, far from giving an undervalued impression.
This is where investors need to be cautious. An overall index figure can be misleading without being accompanied by a deeper analysis of the composition and valuation of each share group.
Shift in Investor Structure
Another equally interesting aspect is investor composition. The share of foreign ownership in the IHSG is at its lowest level in 15 years, while domestic investors — particularly social insurance funds — are becoming increasingly dominant. The inflow of large funds from these local institutions acts as a
Follow Us on:
PT Syailendra Capital is licensed and supervised by the Indonesia Financial Services Authority (OJK)