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IDX adds two companies to LQ45 Futures
The bourse has revised its most liquid index, by replacing two publicly listed companies in a move an analyst says creates a clearer picture of the market.
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A woman walks past a lighted display showing fluctuations in the Indonesia Stock Exchange (IDX) Composite index on July 9 at the bourse in South Jakarta. (Antara/Rivan Awal Lingga)
The Indonesia Stock Exchange (IDX) has revised LQ45 Futures, its most liquid index, by replacing two publicly listed companies.
Diversified petrochemical firm PT Barito Pacific, trading as BRPT, and state-owned miner PT Timah (TINS) made their appearance on the list to replace Bank BTPN Syariah (BTPS) and property developer Ciputra Development (CTRA).
Central Capital Futures analyst Wahyu Laksono said the revision was due to a review of the free-float methodology, which would give investors a much better picture of the futures market.
“This will ultimately benefit investors. Investors, especially retail [investors], can assess conditions better, as the [LQ45 index] will reflect movements more objectively,” Wahyu told The Jakarta Post on Wednesday.
The Indonesian bourse adopted free-float methodology in 2019 with the aim to encourage listed companies to increase the number of shares available to the general public.
Wahyu added that the volume of a company’s free float would determine its weighting on the futures index. The larger the free float portion, the greater the company’s weight, and vice versa.
Read also: IDX's new calculation reflects fairer shares value
