IHSG is an abbreviation of: Explanation, How to Read Data, and History of the Composite Stock Price Index

Bittime -  The Composite Stock Price Index (IHSG) is one of the main indicators in the Indonesian capital market. IHSG reflects price movements of all shares listed on the Indonesia Stock Exchange (BEI). 

This article will comprehensively discuss the meaning of the IHSG, how to read the data, its history, current conditions, and the impact of the IHSG recovery on the economy.

IHSG Is: Meaning and Explanation

IHSG is an abbreviation of Composite Stock Price Index, an index used to measure the performance of all shares listed on the IDX. In English, IHSG is known as Indonesia Composite Index or IDX Composite. 

This index was first introduced on April 1, 1983 with a base value of 100, based on calculations on August 10, 1982 involving 13 shares.

IHSG uses the method Market Value Weighted Average Index, where the weight of each share is determined based on its market value. This index is a reference for investors to understand overall market conditions without having to analyze each stock individually.

How to Read IHSG Data

IHSG data can be accessed via the official IDX website or other investment platforms. Here are several ways to read IHSG data:

• Daily Movement: If the JCI rises significantly in one day, it is recommended not to buy these shares because the risk of correction is high. On the other hand, if the JCI falls, it could be an opportunity to buy shares with in-depth analysis.
  
   
• Calculation Formula:
  

Where the market value is the result of multiplying the number of listed shares with the current market price, while the basic value is the result of multiplying the number of shares on the base day with the price on that day.

 

History of the Combined Stock Price Index

IHSG was introduced by the IDX in 1983 as an indicator of stock price movements in Indonesia. The basic day for calculating the JCI was August 10, 1982 with an initial index value of 100. At that time, there were only 13 shares listed on the stock exchange..

Over time, the JCI continues to develop and record various important achievements. The highest intraday position of the JCI was 7,377.49 points on September 15 2022, while the highest closing occurred on September 13 2022 with a value of 7,318.20 points.

IHSG Condition Today

On March 28 2025, IHSG showed positive growth of 4.03% in the last week. The value reached the level of 6,510,620 from the previous 6,258,179. Average daily transactions also increased to IDR 18.60 trillion, indicating increasingly busy market activity.

Foreign investors recorded net purchases of IDR 623.65 billion on the previous day, although throughout this year there were still net sales of IDR 29.92 trillion..

Impact of IHSG Recovery

The IHSG recovery has a significant impact on the Indonesian economy. As the main indicator of the capital market, the increase in the IHSG is often associated with increased investor confidence and financial system stability. 

Research shows that the IHSG movement has a strong influence on macroeconomic variables such as the Consumer Price Index (CPI), industrial production (IPI), and money supply (M2)..

This recovery can also increase market capitalization and strengthen the attractiveness of foreign investment in Indonesia.

Conclusion

IHSG is an important indicator in understanding the condition of the Indonesian capital market. With a long history since 1983 and its influence on macroeconomics, the JCI has become a vital tool for investors and the government in making strategic decisions.

FAQ

What is the main function of IHSG?

IHSG is used to measure the performance of all shares listed on the IDX and provides a general overview of the condition of the Indonesian capital market.

How do you read the IHSG movement?

Pay attention to daily trends and use fundamental analysis to decide on the right investment steps.

When was the IHSG first introduced?

IHSG was introduced on April 1, 1983 by the Indonesia Stock Exchange (formerly the Jakarta Stock Exchange).

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Reference:

Business, IHSG Melesa 4.03% in a Week, Accessed March 28, 2025

BPR, What is IHSG, Accessed March 28, 2025

RHBTradeSmart, How to Predict IHSG, Accessed March 28, 2025

IDX, BEI Overview and History, Accessed March 28, 2025

Author: Irwan