Responded on these conditions, fund managers, investors and issuers helping together to help the stock market - Photo by IDX

JAKARTA (TheInsiderStories) – The impact of the spread of COVID-19 has affected various aspects of life, including the economy, the corporate income and investment. The bearish trend also touched the capital markets of a number of countries, including Indonesia.

Responded on these conditions, fund managers, investors and issuers helping together to help the stock market. The regulators also issued various incentives to help the market. But so far, there is no significant impact to boost the investors confidence.

The state own ministry office policies by order the state companies buyback their shares in the market also not give impact to the market. In this month only Indonesia Stock Exchange (IDX) has halted the stock trading three times even the Jakarta Composite Index touched the lowest level since 2016 today.

CEO of BP JAMSOSTEK, Agus Susanto, rated in the current sluggish market conditions are actually a good opportunity to enter the market and buy good stocks at low prices. While, the economist from Atma Jaya Catholic University, Martin Panggabean as quoted by Kontan, very pessimistic seeing the current conditions.

“It seems there is something outside of global issues, there is something very structural that is happening in Indonesia. So if you look at a situation like this, I will still feel the market is also likely that the maximum will only increase by 10 percent for 2020,” he noted.

According to him, the IDX is very busy picking up new issuers whit low quality. So instead, getting market liquidity, he asserted, the regulator are busy with suspension, delisting, and so forth.

“The Financial Service Agency (FSA) also has a big problem. We see their failure to take care of insurance issues, for example Jiwasraya. And then the furor with the financial technology like mushrooms being killed here, not to mention we see multi-finance companies that turned out to be a lot of problems too,” said Panggabean.

In this situation like this, he suggested, the investors must be very selective in choosing financial instruments.

Buyback Program

Dozens of issuer has announced to buyback their shares, most of them are state-owned companies. The state firm has targeting to buyback the shares up to Rp8 trillion. PT Bank Rakyat Indonesia Tbk (IDX: BBRI) and PT Bank Negara Indonesia Tbk (IDX: BBNI) said it would buyback shares up to a maximum of Rp3 trillion and Rp1 trillion, respectively.

Three state miner, PT Antam Tbk (IDX: ANTM), PT Timah Tbk (IDX: TINS), and PT Bukit Asam Tbk (IDX: PTBA) also plans to buyback their shares. Antam prepared Rp100 billion, PT Timah also Rp100 billion, and Bukit Asam with a maximum value of Rp300 billion.

Other publicly listed from private sectors also announces to repurchases their stock from the market. Pharmaceutical issuer PT Kalbe Farma Tbk (IDX: KLBF) allocated Rp18.75 billion, property company PT Surya Semesta Internusa Tbk (IDX: SSIA) as much as Rp300 billion, and PT Bank Panin Tbk (IDX: PNBN) up to Rp480 billion.

Two energy producer, PT Medco Energy International Tbk (IDX: MEDC) and PT AKR Corporindo Tbk (IDX: AKRA) also announced to repurchase shares by prepare $3 million and Rp500 billion, each. Garment producer PT Pan Brothers Tbk prepared cash Rp210 billion, PT Lautan Luas Tbk (IDX: LTLS) Rp250 billion, the retailer PT Ramayana Lestari Sentosa Tbk (IDX: RALS) Rp250 billion.

The FSA has allowed listed companies to buyback shares up to 20 percent of their paid-up capital without need a shareholders approval. The new policy has been taken in an effort to ease market volatility and provide the stimulus to the market.

Various stimulus has given by the government and central bank unable to boost the financial market. Since the beginning of 2020, Indonesian stock trading experienced significant pressure, which is indicated from the decline in the JCI around 20 percent until today.

This happened inline with the slowdown and pressure of the global, regional, and national economy as a result of the COVID-19 outbreak and weakening world oil prices. In the midst of negative sentiment surrounding the global financial markets, the agency urged the investors not to panic and continue to invest based on in-depth analysis.

Need more breakthrough for the regulators to boos the investors confidence in Indonesian market.

US$1: Rp14,500

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