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Retail investors now dominate stock market: IDX
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The IDX logo is seen in front of a giant screen displaying stock prices at the Indonesia Stock Exchange (IDX) in Jakarta on March 13. (JP/Seto Wardhana)
Retail investors now dominate stock trading in Indonesia, accounting for 52 percent of the trading value in June.
Indonesia Stock Exchange (IDX) development director Hasan Fawzi noted that the percentage of retail investors’ trading value would be even bigger if their indirect transactions through mutual funds were considered. The figure indicates significant growth in retail investors' participation in stock market, he added.
“We can see that in June 2020, total retail investors’ trade is up 86 percent,” Hasan said during The Jakarta Post’s Jakpost Up Close webinar series titled “Investing in stocks: Best strategies in volatile times” on Wednesday.
“The fastest growth, interestingly, is coming from our youngest investor group, those between 18 and 25 years of age.”
According to data from the Indonesian Central Securities Depository (KSEI) that Hasan cited in his presentation, the number of investors aged 18 to 25 grew by 338.61 percent from 2016 to May 2020. Meanwhile, the number of investors aged 26 to 30 grew by 204.97 percent.
Older investors still make up a big part of all investors, but their number has grown at a slower rate. The number of investors aged 31 to 40 increased by 113.85 percent during the same period, while that of investors aged 41 to 100 rose by 52.06 percent.
Hasan noted that investors of the fastest-growing age group were most likely to derive their wealth from their parents, as they were either still in school or in the early stages of their career.
Despite this, the IDX education program has been focused to target this segment, as these investors would probably be the accelerators of the Indonesian capital market in the next 5 to 10 years along with their financial capacity strengthening over the years, Hasan said.
For members of the public who are still considering entering the local bourse, Hasan said: “The very best starting strategy for investing in stock is first to invest in yourself.”
He suggested that new or soon-to-be stock market investors understand their own investment profile first, including their investment goals and risk profile.
The next step would be to continue enhancing their knowledge, skills and experience, so that investors would be able to adopt the strategy that best fits their own profile.
According to single investor identification (SID) data, 45 percent of the country’s 2.4 million people registered as retail investors as of the end of 2019 were between the age of 21 and 30.
