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The stunned look in traders’ eyes said it all as they stepped into the cavernous trading hall of the Indonesia Stock Exchange in Jakarta on the afternoon of Black Wednesday, Oct. 8, 2008.

Groups of brokers chattered nervously around the room where trading had been abruptly suspended just before noon after the Jakarta Composite Index went into free-fall in the two days before.

It was only the second time that trading was suspended in the bourse’s 31-year history and it was to remain closed for an unprecedented three days.

The disastrous events of that day were precipitated just over three weeks earlier and more than 16,000 kilometers away in New York with the collapse of Lehman Brothers on Sept. 15, 2008.

It was all a far cry from January that year, when the JCI reached its highest-ever level of 2,800, before beginning a long decline as investors cashed in gains.

But it was the emergence of worries over subprime mortgages that really upped the ante between July and September, with the gauge slumping to 1,700 by mid-September.

But even after Lehman’s collapse on Sept. 15, the JCI managed to claw its way back to 1,897 before plunging to a nadir of 1,111 on Oct. 28, after the true magnitude of the unfolding global crisis became apparent to local traders.

The Indonesia Stock Exchange (IDX) and regulators finally decided they had no option but to suspend trading on Oct. 8-10 in an attempt to calm investors after the index fell more than 10 percent on both Oct. 6 and 7.

Losing more than 20 percent in the October crash, the gauge closed the year down 47 percent.

After bottoming out at 1,111 points, it started the new year in a volatile mood and stayed that way until the end of February, when the beginnings of a bull run began to emerge, as investors rediscovered their appetite for risk.

“The impact of the crisis since the fall of Lehman Brothers is still felt in our markets, including the stock market, but the situation has improved significantly,” said PT HD Capital analyst Budi Ruseno.

He said the JCI had gained 78 percent so far this year, far exceeding its October losses of more than 20 percent, meaning that investor confidence had recovered.

Lili Widjaya, chairwoman of the Association of Indonesian Securities Companies (APEI), said the market was no longer in a state of shell shock. “The market has more or less recovered,” she said. “A bullish trend is apparent.”

Haryajid Ramelan, chairman of the Indonesian Stock Analysts Association (AAEI), said that it was the “return of foreign investors that has significantly boosted the market.”

Haryajid said the local market was now mainly being driven by agricultural, mining and commodity stocks. But banking stocks are also playing a part in supporting the recovery, he added.

He said he expected the stock market would continue on an upward trajectory next year on the back of the government’s economic policies.

“External factors will recede as the US-led economic recovery gathers momentum,” he said.

He added that the local market was also looking forward to a number of big initial public offerings next year by state-owned companies.

“And there was also a blessing in disguise, as the Capital Market and Financial Institution Supervisory Agency [Bapepam-LK] was forced to amend the existing regulations and introduce new regulations that are more protective of investors,” Haryajid said, referring to the regulator’s restrictions on margin trading and other changes that were introduced to improve investor confidence in the markets.