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IDX to introduce new trading board for penny stocks
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The trading floor of Indonesia Stock Exchange (IDX) building. (JP/Wienda Parwitasari)
I
ndonesia Stock Exchange (IDX) is considering creating a new trading board in a bid to accommodate its plan to change the rule for penny stocks trading at Rp 50 (less than 1 US cent) apiece.
Hamdi Hassyarbaini, IDX’s director for transactions supervision, said Thursday that the current stock price limit of Rp 50 was a form of market intervention that should be eliminated.
“In the future, the stock price would be fully dependent on market demand. If the market thinks that the stock price is worth Rp 5, then so be it,” he said after attending an extraordinary general shareholder meeting in Jakarta.
The creation of a special trading board for penny stocks, separate from the existing board, is important to diminish the technical obstacles that may come up if the rule is implemented.
“For instance, if the stock price is Rp 5, an increase of Rp 1 means 20 percent profit. This would impact the determination of tick size and auto-rejection mechanism as well,” he said.
Furthermore, if the stock price is too low, it is possible that administrative fees become more expensive than the stock price itself, IDX president director, Tito Sulistio, said.
“We are trying to tell this to people now so they are able to prepare. We actually want to do it this year, but it seems a little bit hard,” he said. (win/dmr)
