Investors cautious over lofty valuations in Indonesia’s booming technology market have sent a gauge of the shares tumbling over the past two months. 

The IDX Sector Technology index has fallen 27% from its August peak after surging 540% since inception in January. Investors have sold shares of data center provider DCI Indonesia, media company Elang Mahkota Teknologi and PT, which make up a combined 76% weighting of the gauge.

The 23-member measure spiked in late May after media reported that Bukalapak – one of the country’s fastest growing e-commerce platforms – filed for local listing. The stock has fallen about one-third from an August high as the company struggled to make a profit despite rising revenues in the first half. 

A global selloff in tech stocks on concerns over rising yields and China’s crackdown on private enterprises has also hurt broader sentiment.

“Indonesia’s current tech companies have not yet proven to be able to generate sizable net profit such as in the U.S. and China, so they are more driven by speculation,” said Rudiyanto, director at Panin Asset Management. 

Still, the gauge is up 368% since launch, compared with a near 9% advance in the Nasdaq 100 during the same period. Rudiyanto expects investor interest in the sector to be rekindled if there’s a mega listing from marketplace giant GoTo Group next year and firms such as Traveloka getting additional funding.

Source: Bloomberg