OJK expects buy back to withhold drop in IHSG

JAKARTA. The Financial Services Authority (OJK) commissioner for capital market supervision Nurhaida is hopeful that a newly issued regulation on stock buybacks could stop the Indonesian Composite Index (IHSG) from dragging the Indonesian Stock Exchange (IDX) down further.

Nurhaida said “buy backs” were allowed because the regulation also stipulated that “other conditions” included a market condition that fluctuated significantly.

“It means that until the circular is revoked, ‘buy backs’ are allowed. Those that were undervalued could benefit from this advantage,” said Nurhaida on Wednesday.

She said the OJK would continue to monitor the domestic financial market developments and would make the measures to keep the financial industry stable.

Nurhaida added that her institution would continue to develop investor trust to maintain the stability of the domestic stock market industry.

IDX executive director, Ito Warsito, said the buy back policy was one of several positive measures to hold back negative sentiments currently affecting the financial market.

“’Buy back’ stocks will become treasury stocks and those stocks will be resold when their prices are high. We have never seen financial losses due to buy backs before,” said Ito.