Stocks

A. General Information

Shares (stocks) is one of the most popular financial instruments. Issuing stock is one of the choices for company’s funding. Moreover, stock is investors' most favourite investment instrument because it offers them an interesting return rate.

Stock can be defined as a sign of capital participation of an individual or institution in a company or corporation. By investing in a company, the party has the claim for the company’s income, assets, and right to attend the General Meeting of Shareholders. test

Benefits

Basically, there are two benefits the investor can get by buying or having stock:

  1. Dividend

    Dividend is profit sharing given by company and comes from the income. Dividend is given after getting the agreement from shareholders in the General Meeting. If an investor wants to receive dividend, he/she must own the stock for a relatively long period, until the ownership term is in the period where he/she is acknowledged as the shareholder who has the right to obtain the dividend.

  2. Capital Gain

    Capital gain is the different between buying price and selling price. Capital gain is obtained through the trading activities carried out in the secondary market. For example, an investor buys ABC’s shares at Rp 3,000 per share and then sells it at Rp 3,500 per share. It means the investor gets capital gain of Rp 500 for every sold share.

Risks

As investment instrument, stock has risks:

  1. Capital Loss

    It is the reverse of Capital Gain. It is a condition when the investor sells his/her shares at lower price than its buying price. For instance, PT XYZ’s shares are bought at Rp 2,000 per share, but aftermath the stock price experiences decrease to the level of Rp 1,400 per share. Afraid of continuous declines, the investor sells the shares at price of Rp 1.400. The investor has retain a capital loss of Rp 600 per share.

  2. Liquidity Risk

    A company, whose shares are owned by public, is stated for bankruptcy by the Court or is being dismissed. In this case, the claiming rights of shareholders get the last priority after all the company’s liabilities are settled (by gathering the fund from selling the company’s assets). If there is an amount of rest of the company’s wealth, it will be shared proportionally to the shareholders. But, if there is no rest left, the shareholders will not receive anything out of the liquidation. This is the worst condition that might happen to shareholders. For that reason, a shareholder needs to observe every development in the company, which shares are owned.

    In secondary market or daily shares trading activities, stock prices fluctuate, either increase or decrease. Prices are formed from the demand and supply of the stock. In other words, prices are formed by supply and demand. Supply and demand are influenced by many factors, either by specific factors such as the company and industry’s performance where the stocks exist or macro factors such as the interest rate, inflation, currency rate, and non-economical factors like social and political conditions, and so on.

B. Sector and Sub Sector Classification

Starting from January 25, 2021, IDX implements the new classification sector and industry of IDX listed company called "Indonesia Stock Exchange Industrial Classification" or IDX-IC. Further information can be accessed on the page of Stock Index (Click Market Data-Stocks index).

  1. Energy (A)

    The Energy Sector includes companies that sell products and services related to energy extraction which include non-renewable energy (fossil fuels) so that their income is directly affected by world energy commodity prices, such as Oil Mining, Natural Gas, Coal, and service providers that support the industry. In addition, this sector also includes companies selling alternative energy products and services.

  2. Basic Materials (B)

    The Basic Materials Sector includes companies that sell products and services used by other industries as raw materials for producing final goods, such as companies that produce Chemical Goods, Construction Materials, Containers & Packaging, Non-Energy Metal & Mineral Mining, and Wood & Paper.

  3. Industrials (C)

    The Industrial Sector includes companies that sell products and services that are generally consumed by industry, not by consumers. The products and services produced are final. This sector includes manufacturers of Aerospace, Defense, Building Products, Electrical Products, Machinery. In addition, this industry also includes providers of Commercial Services - such as Printing, Environmental Management, Industrial Goods and Services Suppliers - and Professional Services - such as Personnel Services and Research Services - for industrial purposes.

  4. Consumer Non-Cyclicals (D)

    The Consumer Non-Cyclicals Sector includes companies that produce or distribute products and services that are generally sold to consumers. The products and sevices are anti-cyclical or primary / basic goods so that demand for these products and services is not influenced by economic growth, such as Primary Goods Retail Companies - Food Stores, Drug Stores, Supermarkets -, Beverage Manufacturers, Packaged Foods, Agricultural Product Vendors, Cigarette Manufacturers, Household Goods, and Personal Care Items.

  5. Consumer Cyclicals (E)

    The Consumer Cyclicals Sector includes companies that produce or distribute products and services that are generally sold to consumers but for cyclical or secondary goods so that the demand for these goods and services is directly proportional to economic growth. This industry includes companies that manufacture Passenger Cars and their Components, Durable Household Goods, Clothing, Shoes, Textile Goods, Sporting Goods and Hobbies. In addition, this industry also includes companies providing tourism, recreation, education, consumer support services, media companies, advertising, entertainment providers and secondary goods retail companies.

  6. Healthcare (F)

    The Healthcare Sector includes companies that provide health products and services such as Healthcare Equipment Manufacturers, Healthcare Service Providers, Pharmaceutical Companies, and Research Companies in the Healthcare Sector.

  7. Financials (G)

    The Financials Sector includes companies that provide financial services such as Banks, Consumer Financing Institutions, Venture Capital, Investment Services, Insurance and Holdings Companies.

  8. Properties & Real Estate (H)

    The Properties and Real Estate sector includes companies that develope properties and real Estate as well as support service providers.

  9. Technology (I)

    The Technology Sector includes companies that sell Technology Products and Services, such as Internet Service Companies that are not internet connection providers, IT Service Providers, IT Consultants, Software Development Companies, Manufacturers in Network Equipment, Computer Devices, Electronic Devices and Components, and Semiconductors.

  10. Infrastructures (J)

    The Infrastructure Sector includes companies that play a role in the construction and procurement of infrastructure, such as Transportation Infrastructure Operator Companies, Civil Building Construction Companies, Telecommunications Companies, and Utility Companies.

  11. Transportation & Logistic (K)

    The Transportation and Logistic Sector includes companies that have a role in transportation and movement activities such as transportation and logistic providers and delivery service providers.

  12. Listed Investment Product (Z)

    The Listed Investment Products Sector includes investment products listed on the Indonesia Stock Exchange.

Click here for more information about List of Stock sector.

C. Listing Board

Potential listed company can be listed on Main Board, Development Board or Acceleration Board:* Net Tangible Assets: Total Assets reduced by Intangible Assets, Deferred Tax Assets, Total Liabilities and Non-Controlling Interests

D. Acceleration Board

Acceleration Board is a Listing Board provided to accommodate issuers with Small-Medium Scale Assets as referred to OJK Regulation Number 53/POJK.04/2017 concerning Registration Statements for Public Offering and Capital Additions by Giving Pre-emptive Rights by Issuers with Small-Scale Assets or Issuers with Medium-Scale Assets. Companies which has not been able to meet the requirements of Development Board also can be listed on this board. The Acceleration Board Registration Regulation imposed by the IDX on July 22nd 2019.

Background

1. Establishment of OJK Regulations Related to Public Offering for Issuers with Small or Medium Scale Assets
On 2017, OJK has enacted POJK Number 53/POJK.04/2017 concerning Registration Statements for Public Offering and Capital Additions by Giving Pre-emptive Rights by Issuers with Small-Scale Assets or Issuers with Medium-Scale Assets.

2. Characteristics of Companies with Small and Medium Scale Assets
Companies with Small and Medium Scale Assets have their own characteristics, so they need to be specifically regulated both from the aspect of requirements, obligations and sanctions.

Target of Listed Companies on the Acceleration Board

Target of listed companies on the acceleration board are companies with small or medium scale assets which the categorization is regulated on POJK Number 53/POJK.04/2017

Benefits

The benefits of Acceleration Board are as follows:

Listing Mechanism

Listing Terms and Conditions

In addition to the Main Board and Development Board, currently the prospective listed company can be listed on the Acceleration Board. Here are some of the leniencies on the Acceleration Board compared to the Main Board and Development Board.* Net Tangible Assets: Total Assets reduced by Intangible Assets, Deferred Tax Assets, Total Liabilities and Non-Controlling Interests

Other requirements that must be fulfilled by Listed Companies which are regulated through OJK Regulations

Listing Fees

Indonesia Stock Exchange sets a lower listing fee for listing on the Acceleration Board:

Movement on Boards

Listed company on the Acceleration Board can be promoted to the Development Board or Main Board at the consideration of the Exchange, when:

  1. Already in compliance with Listing requirements of the Development Board or Main Board and;

  2. No longer in compliance with the criteria of small or medium scale assets companies according to POJK 53.

For more information about the Acceleration Board Listing Regulations can be downloaded here.
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