Stocks

A. General Information

Shares (stocks) is one of the most popular financial instruments. Issuing stock is one of the choices for company’s funding. Moreover, stock is investors' most favourite investment instrument because it offers them an interesting return rate.

Stock can be defined as a sign of capital participation of an individual or institution in a company or corporation. By investing in a company, the party has the claim for the company’s income, assets, and right to attend the General Meeting of Shareholders. test

Benefits

Basically, there are two benefits the investor can get by buying or having stock:

  1. Dividend

    Dividend is profit sharing given by company and comes from the income. Dividend is given after getting the agreement from shareholders in the General Meeting. If an investor wants to receive dividend, he/she must own the stock for a relatively long period, until the ownership term is in the period where he/she is acknowledged as the shareholder who has the right to obtain the dividend.

  2. Capital Gain

    Capital gain is the different between buying price and selling price. Capital gain is obtained through the trading activities carried out in the secondary market. For example, an investor buys ABC’s shares at Rp 3,000 per share and then sells it at Rp 3,500 per share. It means the investor gets capital gain of Rp 500 for every sold share.

Risks

As investment instrument, stock has risks:

  1. Capital Loss

    It is the reverse of Capital Gain. It is a condition when the investor sells his/her shares at lower price than its buying price. For instance, PT XYZ’s shares are bought at Rp 2,000 per share, but aftermath the stock price experiences decrease to the level of Rp 1,400 per share. Afraid of continuous declines, the investor sells the shares at price of Rp 1.400. The investor has retain a capital loss of Rp 600 per share.

  2. Liquidity Risk

    A company, whose shares are owned by public, is stated for bankruptcy by the Court or is being dismissed. In this case, the claiming rights of shareholders get the last priority after all the company’s liabilities are settled (by gathering the fund from selling the company’s assets). If there is an amount of rest of the company’s wealth, it will be shared proportionally to the shareholders. But, if there is no rest left, the shareholders will not receive anything out of the liquidation. This is the worst condition that might happen to shareholders. For that reason, a shareholder needs to observe every development in the company, which shares are owned.

    In secondary market or daily shares trading activities, stock prices fluctuate, either increase or decrease. Prices are formed from the demand and supply of the stock. In other words, prices are formed by supply and demand. Supply and demand are influenced by many factors, either by specific factors such as the company and industry’s performance where the stocks exist or macro factors such as the interest rate, inflation, currency rate, and non-economical factors like social and political conditions, and so on.

B. Sector and Sub Sector Classification

Starting from January 25, 2021, IDX implements the new classification sector and industry of IDX listed company called "Indonesia Stock Exchange Industrial Classification" or IDX-IC. Further information can be accessed on the page of Stock Index (Click Market Data-Stocks index).

  1. Energy (A)

    The Energy Sector includes companies that sell products and services related to energy extraction which include non-renewable energy (fossil fuels) so that their income is directly affected by world energy commodity prices, such as Oil Mining, Natural Gas, Coal, and service providers that support the industry. In addition, this sector also includes companies selling alternative energy products and services.

  2. Basic Materials (B)

    The Basic Materials Sector includes companies that sell products and services used by other industries as raw materials for producing final goods, such as companies that produce Chemical Goods, Construction Materials, Containers & Packaging, Non-Energy Metal & Mineral Mining, and Wood & Paper.

  3. Industrials (C)

    The Industrial Sector includes companies that sell products and services that are generally consumed by industry, not by consumers. The products and services produced are final. This sector includes manufacturers of Aerospace, Defense, Building Products, Electrical Products, Machinery. In addition, this industry also includes providers of Commercial Services - such as Printing, Environmental Management, Industrial Goods and Services Suppliers - and Professional Services - such as Personnel Services and Research Services - for industrial purposes.

  4. Consumer Non-Cyclicals (D)

    The Consumer Non-Cyclicals Sector includes companies that produce or distribute products and services that are generally sold to consumers. The products and sevices are anti-cyclical or primary / basic goods so that demand for these products and services is not influenced by economic growth, such as Primary Goods Retail Companies - Food Stores, Drug Stores, Supermarkets -, Beverage Manufacturers, Packaged Foods, Agricultural Product Vendors, Cigarette Manufacturers, Household Goods, and Personal Care Items.

  5. Consumer Cyclicals (E)

    The Consumer Cyclicals Sector includes companies that produce or distribute products and services that are generally sold to consumers but for cyclical or secondary goods so that the demand for these goods and services is directly proportional to economic growth. This industry includes companies that manufacture Passenger Cars and their Components, Durable Household Goods, Clothing, Shoes, Textile Goods, Sporting Goods and Hobbies. In addition, this industry also includes companies providing tourism, recreation, education, consumer support services, media companies, advertising, entertainment providers and secondary goods retail companies.

  6. Healthcare (F)

    The Healthcare Sector includes companies that provide health products and services such as Healthcare Equipment Manufacturers, Healthcare Service Providers, Pharmaceutical Companies, and Research Companies in the Healthcare Sector.

  7. Financials (G)

    The Financials Sector includes companies that provide financial services such as Banks, Consumer Financing Institutions, Venture Capital, Investment Services, Insurance and Holdings Companies.

  8. Properties & Real Estate (H)

    The Properties and Real Estate sector includes companies that develope properties and real Estate as well as support service providers.

  9. Technology (I)

    The Technology Sector includes companies that sell Technology Products and Services, such as Internet Service Companies that are not internet connection providers, IT Service Providers, IT Consultants, Software Development Companies, Manufacturers in Network Equipment, Computer Devices, Electronic Devices and Components, and Semiconductors.

  10. Infrastructures (J)

    The Infrastructure Sector includes companies that play a role in the construction and procurement of infrastructure, such as Transportation Infrastructure Operator Companies, Civil Building Construction Companies, Telecommunications Companies, and Utility Companies.

  11. Transportation & Logistic (K)

    The Transportation and Logistic Sector includes companies that have a role in transportation and movement activities such as transportation and logistic providers and delivery service providers.

  12. Listed Investment Product (Z)

    The Listed Investment Products Sector includes investment products listed on the Indonesia Stock Exchange.

Click here for more information about List of Stock sector.

C. Listing Board

Potential listed company can be listed on Main Board, Development Board or Acceleration Board:* Net Tangible Assets: Total Assets reduced by Intangible Assets, Deferred Tax Assets, Total Liabilities and Non-Controlling Interests

D. Acceleration Board

Acceleration Board is a Listing Board provided to accommodate issuers with Small-Medium Scale Assets as referred to OJK Regulation Number 53/POJK.04/2017 concerning Registration Statements for Public Offering and Capital Additions by Giving Pre-emptive Rights by Issuers with Small-Scale Assets or Issuers with Medium-Scale Assets. Companies which has not been able to meet the requirements of Development Board also can be listed on this board. The Acceleration Board Registration Regulation imposed by the IDX on July 22nd 2019.

Background

1. Establishment of OJK Regulations Related to Public Offering for Issuers with Small or Medium Scale Assets
On 2017, OJK has enacted POJK Number 53/POJK.04/2017 concerning Registration Statements for Public Offering and Capital Additions by Giving Pre-emptive Rights by Issuers with Small-Scale Assets or Issuers with Medium-Scale Assets.

2. Characteristics of Companies with Small and Medium Scale Assets
Companies with Small and Medium Scale Assets have their own characteristics, so they need to be specifically regulated both from the aspect of requirements, obligations and sanctions.

Target of Listed Companies on the Acceleration Board

Target of listed companies on the acceleration board are companies with small or medium scale assets which the categorization is regulated on POJK Number 53/POJK.04/2017

Benefits

The benefits of Acceleration Board are as follows:

Listing Mechanism

Listing Terms and Conditions

In addition to the Main Board and Development Board, currently the prospective listed company can be listed on the Acceleration Board. Here are some of the leniencies on the Acceleration Board compared to the Main Board and Development Board.* Net Tangible Assets: Total Assets reduced by Intangible Assets, Deferred Tax Assets, Total Liabilities and Non-Controlling Interests

Other requirements that must be fulfilled by Listed Companies which are regulated through OJK Regulations

Listing Fees

Indonesia Stock Exchange sets a lower listing fee for listing on the Acceleration Board:

Movement on Boards

Listed company on the Acceleration Board can be promoted to the Development Board or Main Board at the consideration of the Exchange, when:

  1. Already in compliance with Listing requirements of the Development Board or Main Board and;

  2. No longer in compliance with the criteria of small or medium scale assets companies according to POJK 53.

For more information about the Acceleration Board Listing Regulations can be downloaded here.

 

E. Securities in Special Monitoring

Securities in Special Monitoring are securities which are determined by the Exchange based on certain criterias in rule number II-S concerning Trading of Securities in Special Monitoring. Securities in special monitoring is part of an ongoing initiative in order to increase investor protection mechanisms.

 

Background and Purpose

Sanction and trading suspension imposed on the Listed Company’s stock are one of the investor protection mechanisms. Trading of the Listed Company's stock will be suspended until certain criterias are met for trading to be resumed.

Investors should have complete information and sufficient time to make their decisions. During the suspension period, investors who own suspended stocks would not be able to trade them. On the other hand, investors with high-risk appetite may want to buy the shares. Therefore, a new mechanism is needed to match the needs of both parties.

 

Benefits


For Investor

  • New protection mechanism
  • Increase investing transparency
  • Accommodating the needs of a wider range of investors

For Listed Company

  • Increase trading liquidity
  • Attention to company performance
  • Providing more time for companies to improve company performance before suspension of the company stock

 

Criteria of Special Monitoring

  1. The average price of shares for the last 6 (six) months in the Regular Market is less than Rp. 51.00 (fifty-one rupiah).

  2. The latest Audited Financial Statements receives a disclaimer opinion;

  3. No sales/income or there is no change in income based on the latest financial statements compared to previous financial statements.

  4. For listed companies which:
    • Operates in the mineral and coal mining business which has carried out the production operation stage but has not entered into sales stage or has not started the production operation stage; or
    • is the parent company that has a controlling interest of a company that operates in the mineral and coal mining business which has carried out the production operation stage but has not entered into sales stage or has not started the production operation stage at the end of the 4th (fourth) fiscal year book since being listed on the Exchange has not received any income from its main business activities (core business).

  5. Has negative equity in the last financial report;

  6. Does not meet the continuous listing obligation in accordance to:
    • Rule number I-A concerning Listing of Shares (Stock) and Equity-Type Securities Other Than Stock Issued by the Listed Company, for Company which listed in Main or Development Board;
    • Rule number I-V concerning Special Provision for Listing of Shares (Stock) and Equity-Type Securities Other Than Stock in Acceleration Board, For Company which listed in Acceleration Board.

  7. Has low liquidity with the daily average transaction value of shares less than IDR 5,000,000.00 (five million rupiahs) and the daily average transaction volume of shares is less than 10,000 (ten thousand) shares during the last 6 (six) months in the Regular Market;

  8. Under a condition in which the company has a Postponement of Debt Payment Obligations (PKPU) or filed for bankruptcy;

  9. Has a subsidiary company in which the income contribution is material for the Listed Company and the subsidiary company has a Postponement of Debt Payment Obligations (PKPU) or filed for bankruptcy;

  10. Subject to temporary suspension of Securities trading for more than 1 (one) Exchange Day which was caused by trading activities; or

  11. Other conditions stipulated by the Exchange after obtaining approval or order from Financial Services Authority.

 

Trading Mechanism

All terms on trading of Securities in Special Monitoring refer to Rule number II-S concerning Trading of Equity Securities in Special Monitoring. Trading in Equity Securities in Special Monitoring is the same as trading in other stocks, except for the provisions of Auto Rejection.

JATS will Auto Reject the order if the bid or ask price is more than 10% above or below the reference price.

 

Special Notation

Special Notation is an additional letter (notation) given to Listed Company ticker code when the company meet certain conditions as referred to in Circular Letter Number SE-00017/BEI/07-2021 concerning Addition of Information Display of Special Notation to the Listed Company Code.

Listed Companies that are included in the category of Securities in Special Monitoring will have special notation “X” (eXtra Caution) on the Listed Company ticker code.

 

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