JAKARTA. Indonesia Stock Exchange (IDX) is likely to remove the bottom price at Rp 50 per share in the first semester of 2017. In other words, it is possible that the price of a share may drop to Rp 0 per a share.
IDX has conducted mock trading on the impact of the revomal the lowest price to Jakarta Composite Index (JCI). The result of the mock trading suggested that the removal does not bring significant impact to the JCI, on the grounds that there are only few shares with the price of Rp 50 per a share. “The index only dropped by 0.15%. The mock trading itself was using the existing price fraction,” said Director of IDX Hamdi Hassyarbaini, Thursday (1/12).
This has also led IDX to delay to create penny stock board. “The cost is too high for only ten shares so that they will be included under the existing board,” Hamdi said.
To date, the price fraction is divided into five ranges of shares, including Rp 50-Rp 200, Rp 200-Rp 5,000, Rp 500-Rp 2,000, Rp 2,000-Rp 5,000, and the shares with the prices of more than Rp 5,000 per a share,
When the floor price of Rp 50 was dismissed, a share with the of under Rp 50 was no longer traded at the negotiation market, but at the regular market. In other words, the new price fraction is required to arrange the shares movement to minimize the unreasonable increase and decrease in shares price.
Recently, IDX is conducting advanced feasibility study over the policy. IDX is also waiting for the permission from Financial Service Authority (FSA) to conduct the policy. However, IDX targets to implement the policy in 2017. “We target (to implement the policy) in the first semester of 2017,” Hamdi said.
Director of Trimegah Sekuritas Syariandi Armand Saleh estimated, it is possible that the share price may drop to Rp 0 if the floor price limit is removed. “But the shares price will return to the normal level, thanks to the market mechanism,” he said.
For an example, the price of a share of A is Rp 25. The price then increases to Rp 50. This will automatically lead traders to sell to obtain gain. At the end, the share price will return to the level of Rp 25.
Furthermore, the issuers with the share price at under Rp 50 can reverse back. After the stock reverse, the share price may increase to Rp 50. However, the price may return to below of Rp 50, on the grounds that the market mechanism depends on the issuer’s fundamental. “Intervention to market is supposed to be minimized,” Hamdi said.
Chairman of Association of Indonesian Securities Companies (APEI) Susi Meilina estimated that the removal will bring many implications. For an example, the adjusted net working capital of a broker may be eroded. “The more essential is, the investors may loose the protection,” Susi said. (Muhammad Farid/Translator)
Editor: Sanny Cicilia