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IDX stays confident ahead of poll
The Indonesia Stock Exchange (IDX) has booked solid growth, both in the number of listed companies and the number of investors, on the back of positive sentiment over the past year
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span>The Indonesia Stock Exchange (IDX) has booked solid growth, both in the number of listed companies and the number of investors, on the back of positive sentiment over the past year.
IDX president director Inarno Djajadi said the bourse was aiming to list 75 companies this year from initial public offerings (IPOs), bonds and collective investments.
Of the total target, the IDX expects most of the newly listed companies this year will come from IPOs.
“At the very least, we expect 75 companies will list their shares this year” IDX assessment director I Gede Nyoman Yetna Setia said during a media gathering in Jakarta.
In 2018, the IDX recorded its highest number of IPOs since its privatization in 1992 with 57 companies listing, ranging from film and TV production firm PT MD Pictures to consumer goods companies such as pharmaceutical firm PT Phapros and food producer PT Garudafood Putra Putri Jaya.
Although the bourse already has 14 companies in its IPO pipeline, the IDX still has some work to do to attain its own target because the bourse had only listed seven companies as of Monday. The latest company to go public was consumer goods company PT Wahana Interfood Nusa.
Nyoman said the bourse had prepared several plans to increase the number of companies listed on the bourse this year.
First, he said, was raising awareness among Indonesian companies through campaigns that ranged from promoting the advantages of going public and establishing relations with ministries to promoting capital market funding for companies and approaching high-level individuals that have connections to conglomerates to persuade their subsidiaries to sell their shares to the public.
Second, the newly adjusted regulation on shares and equity listing this year will hopefully facilitate more companies with intangible assets, such as startup companies and small and medium enterprises, in making IPOs, he said.
Nyoman added that the bourse, together with the Finance Ministry and the Taxation Directorate General, was working on giving tax incentives for listed companies as part of its efforts to entice more firms to go public.
Aside from increasing the number of listed companies, IDX development director Hasan Fawzi said it also aimed to increase the number of retail equity investors this year.
“We expect the number to increase by 25 percent from last year,” he said.
The Indonesian Central Securities Depository (KSEI) recorded a total of 1.6 million investors in 2018 — more than 852,000 of whom were retail equity investors. Meanwhile, the KSEI recorded a total of almost 912,000 investors as of March 19.
Hasan said to increase the number of investors, the bourse would continue to educate the public through social media, advertisements, its own capital market school and the #YukNabungSaham campaign to raise awareness among prospective investors, particularly those under the age of 30.
He added that the bourse would also increase the number of active investors through developing the country’s sharia capital market.
“Around 56 percent of the total 44,536 investors in the sharia capital market were active investors last year. So, we hope this will increase the number of active investors,” he said.
Although the IDX board of directors was optimistic about reaching its ambitious target this year, Inarno said there were some challenges facing the market this year.
Those challenges, he said, included the United States Federal Reserve’s stance on rate hikes, slowing global economic growth, volatile commodity prices and trade tensions between the US and China.
Meanwhile, he also cited Bank Indonesia’s monetary policy, the current account deficit and the April 17 elections as domestic challenges that would affect the market this year.
Inarno said, however, that he hoped the bourse and the country’s capital market would be able to deal with these challenges, particularly regarding the election as the Jakarta Composite Index (JCI) had maintained its excellent performance in the last three elections in 2004, 2009 and 2014.
“I think Indonesia is mature enough to separate politics from the market,” he said. “So, if there are any shocks, they will only be temporary.”
