Indonesia as the biggest Muslim country in the world is holds an enormous market for the development of sharia finance industry. Sharia capital market, which is part of the Sharia finance industry, has an important role in increasing the market share of Sharia finance industry in Indonesia. Although its development is still new compared to the Sharia banking, Indonesia's sharia capital market is expected experience rapid growth along with significant growth in Indonesian capital Market Industry.
As far known, sharia capital market in Indonesia is associated to the Jakarta Islamic Index (JII), which only composed of 30 sharia securities listed in Indonesia Stock Exchange (IDX), whereas Sharia Securities existed in the Indonesian Sharia capital market are not only consists of 30 shares that become the constituents of JII but also consists of various types of securities. This was become more apparent after Bapepam-LK issued Sharia Securities List (DES) in November 2007. Since then, Bapepam-LK made DES as the only reference for Sharia Securities in Indonesian capital market.
According to the Regulations of Bapepam-LK Rule No IX.A.13 concerning Issuance of Sharia Securities, item 1.a.3, Sharia Securities is Securities as defined in Capital Market Law and its implementing regulations in which its contract and issuance method fulfills the Sharia Principles in Capital Market.(Includes description about the List of Syariah Securities). Read more.
Fatwa and Legal Foundation
Different from other securities, Sharia Securities need not only beside legal foundation, both in the form of regulations or laws, but also fatwa that can be used as reference to the enactment of Sharia Securities. Fatwa are needed as a basis to establish sharia principles that could be applied in the capital market. Read more.
Sharia Capital Markets Products in Indonesia Stock Exchange
The selection criteria of sharia stocks are based on Bapepam-LK Regulations No II.K.1 concerning Criteria and Issuance of Sharia Securities List, item 1.b.7. The regulation states that Securities in the form of shares, including sharia rights and sharia warrant, issued by Issuer or Public Company who does not declare that its business activities and management are conducted based on Sharia Principles, as long as the Issuer or Public Company fulfills. Read more.
According to Bapepam-LK Rule No IX.A.13 concerning Issuance of Sharia Securities, Sukuk is Sharia Securities in a form of certificate or proof of ownership which have the same value and represent participation unit which is not separated from or consists of. Read more.
JII was initially launched by IDX (which was known as JSX at that time) in collaboration with PT Danareksa Investment Management on July 3, 2000. However, in order to generate longer historical data, the base date for the calculation of JII is using January 2, 1995 with index base number of 100. The methodology for JII’s calculation is the same that used in Jakarta Composite Index (JCI) that is based on the Market Value Weigthed Average Index using Laspeyres formula. Read more.
- Indonesia Sharia Stock Index
Indonesia Sharia Stock Index is an Index that has been launched by Indonesia Stock Exchange (IDX) on May 12, 2012. Constituent ISSI are all of sharia stock and listed on the Indonesia Stock Exchange, where at this time, they are 219 stock which is constituent of ISSI. Indonesia Stock Exchange has two stock based of Sharia Stock, they are ISSI and JII.
Milestones Sharia Capital Market Development in Indonesia
The Milestones of the development of sharia capital market in Indonesia was started on July 3rd, 2000 by the issuance of JII. Eventhough PT Danareksa Investment Management had priory launched a Danareksa Sharia on July 3, 1997, but due to the Self Regulatory Organizations (SRO) has not issued an official instrument related to Sharia Securities, the developments of Sharia capital market is not yet reckoned until the issuance of JII. Read more.
Education Schedule and Socialization of Sharia Capital Market
Sharia Capital Market Education and Socialization schedule by the Indonesia Stock Exchange with relevant institutions. Read more.
Question & Answer
Frequently asked Question and Answer about Sharia Capital Market. Read more.
Contact IDX personnel for further question about Sharia Capital Market. Read more.