Under normal market conditions, banking stocks should trade at more than 2x to 3x PBV, Roeslani said in Jakarta.
“If we look at banking stocks, their price-to-book ratios are below 1, whereas under normal conditions they should be above 2 or 3. So definitely there’s potential upside,” he said.
Roeslani said market volatility was normal and stressed that Indonesian listed companies remained fundamentally strong and continued to offer attractive returns.
He added that confidence in Indonesia’s capital market was reflected in the growing number of retail investors, which rose to around 26 million-27 million from about 20 million a year earlier.
Indonesia’s benchmark Jakarta Composite Index fell 3.08 percent to 6,396.27 by the end of Tuesday’s first trading session.
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Translator: Muhammad Heriyanto, Kuntum Khaira
Editor: Anton Santoso
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