How the Mighty BBCA Has Fallen in IHSG

Once perceived as the safest and highest-quality banking stock in Indonesia, BBCA’s share price has significantly underperformed, declining from its all-time high of IDR 10,950/share in 4Q24 to now trading at IDR 6,000/share, down around -45%.

Over the same period, it has lost around IDR 600 trillion in market capitalization and experienced a substantial valuation de-rating, where its price-to-book value (PBV) now stands at 2.9x (-2 standard deviation), the lowest level in more than a decade.

Coincidentally, the underperformance began shortly after President Prabowo was inaugurated, raising the question of whether the de-rating stems from company-specific factors or higher country-risk in Indonesia.

• It is likely a combination of both, as new government policies are largely unfavorable for financial markets and the broader economy, leading to weaker earnings growth for BBCA, thereby fueling selling pressure, particularly from foreign investors.

Nevertheless, the downtrend has been attributed to a combination of slowing earnings growth, rising country-risk premium, a weakening macro outlook, and global index rebalancing.