Indonesia stocks tumbled on Monday, extending a rout as investors grew jittery over the country’s economic outlook.
The benchmark Jakarta Composite Index fell as much as 4.7%, the biggest one-day slide in nearly a week. Healthcare shares were the worst performing sector.
“Investors are generally feeling uncertain about where the economic policies are heading towards under President Prabowo,” said Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities.
The selloff came as the government started transferring ownership of several top state companies, such as telecommunications firm PT Telkom Indonesia and steelmaker PT Krakatau Steel, to the new sovereign wealth fund Danantara.
The Southeast Asian country’s financial markets have been under pressure in recent weeks due to concerns that the populist agenda of President Prabowo Subianto, including costly welfare plans, may strain the nation’s finances and threaten to sap economic activity.
The transfer of state firms’ ownership to the sovereign wealth fund “seemed to have continued to unsettle investors,” Wong said. “Also, the government is scheduled to reveal full management team today, that has added to the whole uncertainty surrounding this market.”
The benchmark index fell as much as 7.1% on March 18, the steepest intraday decline since 2011. It also breached the 5% threshold that day and triggered circuit breakers that halted trading for 30 minutes.