JAKARTA. The liquidity of domestic stock market is still low. There are more than 500 issuers listed on Indonesia Stock Exchange (IDX). However, only 115 of 540 issuers have daily transaction value of above Rp 10 billion.

“Ideally, 80% of shares in a stock market are liquid,” said the Chairman of Association of Indonesian Securities Companies Susi Meilina, Thursday (15/12). According to Susi, most of the shares with the high liquidity are derived from LQ45 index, such as the shares of PT Bank Central Asia Tbk (BBCA). As of 9 December, the average of daily transaction value of BCA was Rp 1.1 trillion on year to date basis.

Aside of BBCA, PT Telekomunikasi Indonesia Tbk (TLKM) recorded the daily transaction value of Rp 476.71 billion. Meanwhile, PT Hanson International Tbk (MYRX), which lately often becomes the top volume at IDX, secured average transaction value of Rp 197.52 billion.

Aside of BBCA, TLKM, and MYRX, some other issuers also booked the daily transaction value of more than Rp 10 billion. For examples, PT Astra International Tbk (ASII) and PT HM Sampoerna (HMSP) recorded the daily transaction values of Rp 362.78 billion and Rp 94.06 billion, respectively.

According to Susi, the low liquidity was driven by the low number of local investors. To date, there are only 100,000 active investors of the total number of investors that amounts to 500,000 investors.

For comparison, 75% of South Korea population have become investors. Meanwhile, in Malaysia, 30% of the country’s population are investors. Susi added that the number of active domestic investors is supposed to exceed 100,000 or is even approaching 500,000.

Likewise, Development Director of IDX Nicky Hogan said that IDX only has a few number of stocks investors, while the active investors are only less than a half of total investors. Therefore, IDX is targeting to increase the number of new investors by 20% to 100,000 investors. IDX will also encourage the implementation of relaxation of margin trading in this year. The increase in the number of shares on the list of margin trading may increase the number of liquid shares.

Susi said that the low liquidity was driven by two factors. First, the public literacy on financial products, mainly the stock market.

Second, the quality of issuers. Sometimes, the IDX records on the issuers’ fundamentals quality do not reflect the real conditions. Therefore, the investors will be struggling to resell the shares. “This will make the investors give up, let alone the new investors,” said Susi.

Director of Sucorinvest Asset Management Jemmy Paul said that in general a foreign investor will spend as much as Rp 10 billion to buy shares at the domestic stock exchange. However, some investors only collect the shares with solid fundamentals. (Muhammad Farid/Translator)

Editor: Barratut Taqiyyah Rafie