Stocks transaction volume hike sharply

JAKARTA. The transaction volume at the Indonesia Stock Exchange (IDX) has sharply increased in January 2017. As of Monday (30/1), the daily transaction volume in average reached 14.04 billion shares. This number is 254% higher compared with the daily transaction volume during the same period in 2016 that only amounted to 3.96 billion shares. This sharp increase was driven by the restoration of symmetrical auto rejection policy.

Along January 2015, the daily transaction volume in average only amounted to 7.04 billion shares. During that time, IDX still applied the symmetrical auto rejection system as the transaction system. However, this system was replaced with asymmetrical auto rejection in August 2015. In average, the daily transaction volume at the IDX in January 2014 and January 2013 were 4.48 billion and 6.18 billion shares, respectively.

Director of Transaction and Compliance Supervision of IDX Hamdi Hassyarbaini said that symmetrical auto rejection allows investors to gain more profits. “Therefore investors were more active in conducting transaction,” Hamdi said, Monday (30/1).

The more flexible bottom price allows market to form the price. There are moments when the market reduces the prices of certain stocks, even by more than 10%.

Those are the right moments for the investors to buy up the shares with the cheap prices. Subsequently, the shares will be sold with the higher prices so that the investors can obtain maximum profits. This is usually conducted by daily traders, mainly those who have large amount of capitals.

This usually takes place on the small caps shares, which are usually dormant. The sudden movement will lead those shares to unusual market activity (UMA).

During January 2017, UMA took place on the shares of LMAS, WICO, PLAS, and nine other small caps shares.

Analyst at Binaartha Parama Sekuritas Reza Priyambada said that the transactions during January 2017 were more active. According to Reza, the sudden movement has significantly increased the transaction volume.

As information, there was phenomenon that the shares of Bakrie Group have recorded top transaction volume during January. For an example, the price of PT Bumi Resources Tbk (BUMI) share had increased from Rp 50 per a share since August 2016. As of Monday (30/1), BUMI has recorded a 600% increase in the share price. On year to date basis, the price of BUMI’s share has increased by 80%.

The share of PT Darma Henwa Tbk (DEWA) almost hit the auto rejection on 20 January. On that day, the price of DEWA’s share increased by around 30%. However, UMA almost took place on DEWA’s share during the end of last week.

On Monday (30/1), IDX imposed the status of UMA on PT Bumi Resources Minerals Tbk (BRMS). Cuurently, BUMI’s performance and trade balance are supported by the debt restructuring. Meanwhile, the increase in global coal price has also contributed to the improvement in the price of BUMI’s share.

However, the higher transaction volume does not necessarily bring significant impact to the average daily transaction at the IDX. According to the analyst at Semesta Indovest Aditya Perdana Putra, the small caps shares have less significant impact to the index, which remains sideways.

During January 2017, the average daily transaction value has increased by around 12% to Rp 5.6 trillion compared with January 2016. The average daily transaction value in January 2015, January 2014, and January 2013 were Rp 6.5 trillion, Rp 5.63 trillion, and Rp 8.26 trillion, respectively.

(Muhammad Farid/Translator)