T

he Indonesia Stock Exchange (IDX) revealed on Thursday its objectives for next year, of which some of the goals appear to be modest.

The stock exchange is targeting to see Rp 7 trillion (US$616 million) in daily transaction in 2014. This year daily transaction target is Rp 5.5 trillion and had reached Rp 6.5 trillion on Thursday.

The IDX is also expecting to host 30 new listed companies next year. It is also targeting to attract 30 companies to conduct initial public offering (IPO) this year, up from 25 set in 2012. To date, as many as 25 new companies have floated its shares on the stock exchange.

President director Ito Warsito said that the IDX maintained its expectation of new firms entering the stock exchange as companies would likely wait and see further development next year, which is an election year.

'€œThey are worried that the market won'€™t be optimum. Considering this, the bourse should reduce its target. However, we maintain it [at 30] to encourage us work harder,'€ Ito said.

Corporate listing director Hoesen said at least eight IPOs are in the pipeline. '€œThe companies will use the financial report from June, which means they have to complete the process this year. However, shares listing on the IDX can be done this year or early next year,'€ Hoesen said.

The Jakarta Composite Index (JCI) closed at 4,518.93 on Thursday, increasing by 0.59 percent compared to a day earlier. The benchmark index touched its record high of 5,214.98 last May 20, before seeing selling pressures over concerns of the US'€™ stimulus tapering.

MNC head of research Edwin Sebayang said election would be one factor affecting the stock market next year.

'€œThe 2014 election is almost the same with the election in 2004, when there was no majority political party or presidential candidate. As long as we don'€™t know who will be in the election, the market will stay. It [the index] will move in a narrow range, but with high volatility,'€ Edwin said.

He cited that in 2004, the index was stagnant at the beginning of the year. However, Edwin said, it rallied in August after the presidential candidate became clearer. Despite the pressures, the index ended far higher of 1,000 by the end of 2004 compared to 691 by the end of 2003.

Besides IPO target, the IDX is also targeting 60 companies to carry out rights issue next year. This year, the target is to see 50 companies conducting rights issue.

For bond issuances, the stock exchange is expecting to see 57 issuances of corporate debt papers and 65 series of government bonds. This year, the target is 42 issuances of corporate bonds and 46 series of government debt papers. Figures from the bourse showed that total conventional and Islamic bonds listed this year to date reached 48 issuances from 41 companies. The amount of the debt papers issued touched Rp 46.69 trillion year to date.

As part of its development measures, the bourse is planning to implement a new regulation of lower lot size starting Dec. 2. Currently, one lot consists of 500 shares. The IDX is aiming to reduce the number to 100 shares. Moreover, it will also adjust the tick price, which is the minimum price movement in which price can change.

Trading director Samsul Hidayat said the lower lot size and adjustment in tick price was aimed to increase liquidity, efficiency and market deepening. Samsul said the lower lot size would ease individual investors to purchase shares. Meanwhile, adjustment of tick price, he said, would give wider price choices and in turn boost liquidity.

Under current regulation, price movement is divided into five groups of stock prices. For stock price below Rp 200 the tick price is Rp 1, for Rp 200 to Rp 500 the tick price is Rp 5, for Rp 500 to Rp 2,000 the tick price is Rp 10, for Rp 2000 to Rp 5,000 the tick price is Rp 25 and above Rp 5,000 the tick price is Rp 50.

Under new regulation, the price movement is divided in only three groups. For stocks priced below Rp 500 the tick price is Rp 1, for Rp 500 to Rp 5,000 the tick price is Rp 5 and for above Rp 5,000 the tick price is Rp 25.