IDX's Management Explained the 2019 Targets After Extraordinary Shareholders Meeting in Jakarta on Thursday (25/10) - Photo by IDX

JAKARTA (TheInsiderStories) – Not so optimistic. Indonesia Stock Exchange (IDX) extraordinary shareholders meeting, Thursday, targeted 2019’s daily stocks transaction for Rp9 trillion (US$600 million), an idle target compared to 2018.

The same goes to Initial Public Offering (IPO) also targeted stagnant at 35 companies, although this year’s has exceeded target by reaching 44 new companies listed at the bourse. This un-increased target is made based on next year macro-assumption, the official said.

To achieve next year’s outlook, said the president director Inarno Djayadi after the extraordinary meeting on Thursday (25/10), IDX will develop services and new products. Besides, he added, the bostf will launch several reference indices for investment products development.
“We will develop derivative products based on sovereign debt instruments, also derivative products for the equity market include structured warrants, single stock futures, and futures index,” he stated.

Then, the self regulatory organization will maintain effort in increasing investors by easing regulation, application system, infrastructure, and doing socialization. Recently, there are more than 800.000 investors registered in the stocks exchange.

Among the stagnant targets established, IDX seemed pessimistic in getting better income. IDX eyes Rp1,13 trillion’s revenues in 2019, an increase by 11.67 percent from this year’s target. The 2019’s net profit is estimated at Rp136.62 billion.

Financial Market Stable

Meanwhilr the Financial Services Authority’s (FSA) Board of Commissioners meeting assessed that the stability of the financial services sector was still in good condition, amid uncertainty in global financial markets.

The continuing trade war between the United States and China is projected to reduce world trade and growth volume. Meanwhile, the move by the Federal Reserves to raise the Federal Fund Rate (FFR) is projected to affect liquidity on global financial markets.

These two things pushed The International Monetary Fund to reduce the estimated global economic growth in 2018 and 2019 from 3.9 percent on year on year basis (YoY) to 3.7 percent in October. These external dynamics also influence the performance of the domestic financial market.

As of Oct. 19, 2018, the Jakarta Composite Index (JCI) recorded a weakening of 2.3 percent, with non-resident investors recording net sell of Rp5.3 trillion. Meanwhile, in line with the stock market, in the Government bond market, non-resident investors also recorded a net sell of Rp800 billion.

Yields on short, medium and long-term tenors on long-term tenor bonds recorded a 13 basis points (bps), 53 bps and 23 bps rise respectively. This yield increase occurred in line with weakness in other emerging markets.

Amidst continued volatility in the financial markets, the intermediary performance of the financial services sector in September to October generally remained positive, said the board. Banking loans and financing grew by 12.69 percent and 6.06 percent (YoY), respectively.

In terms of fund raising, banking third party funds also grew by 6.60 percent compared to last year. Life insurance and general insurance / reinsurance premiums as of September 2018 were recorded at Rp141.14 trillion and Rp62.74 trillion, respectively.

While in the capital market, in the period from January to October 22, 2018, fund raising through IPO, rights issues and corporate bonds, the funds collected by the corporation reached Rp143 trillion, with new issuers amounting to 50 companies.

Total investment under management funds amounted to Rp739.95 trillion, an increase of 7.89 percent compared to the end of 2017.
The risk profile of financial services institutions is also maintained at a manageable level.

Furthermore, the FSA said, the gross banking Non-Performing Loan ratio stood at 2.606 percent, while the Non-Performing Financing (NPF) ratio of finance companies was at 3.17 percent. Meanwhile, the capital of financial services institutions was recorded at a fairly high level.

Banking Capital Adequacy Ratio as of September 2018 was recorded at 23.33 percent, while Risk-Based Capital in the general insurance and life insurance industries was 315 percent and 430 percent  respectively.

The agency rated, the dynamics in financial markets are expected to continue as global downside risks remain high, including continuing trade war and tightening liquidity. Looking ahead, FSA will continue to monitor these developments, so as not to disrupt financial system stability and the performance of the financial services sector.

US$1: Rp15,000

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