JAKARTA (TheInsiderStories) – Indonesia Stock Exchange’s (IDX) new president director Inarno Djajadi faces challenge to bring more companies and investors into the local market. The former commissioner of IDX was appointed by the Financial Services Authority replacing Tito Sulistio’s position on Friday (29/06).
The Annual General Meeting of Shareholders of IDX has picked the new board management of the company namely:
1. Inarno as President Director
2. I Gede Nyoman Yetna as Director of Corporate Valuation
3. Laksono Widodo as Director Trading and Regulation of Exchange Members
4. Kristian Sihar Manullang as Director of Transaction and Compliance Supervision
5. Fithri Hadi as Director of Information Technology and Risk Management,
6. Hasan Fawzi as Director of Development
7. Risa Effenita Rustam as Director of Finance and Human Resources.
Previously, Sulistio and his team has goal to bring the local bourse as the largest stock exchange in ASEAN by 2020. But from the latest data progress, the goal is still far from expectations.
In terms of number of issuers, so far only 580 companies listed on the IDX, while in Malaysia has 907 issuers and Singapore 755 issuers. Stock market capitalization also below the market in the region only US$463 billion compared to Thailand $529 billion and Singapore worth of $755 billion.
Under the global pressures, many challenges must be solved by the new board of IDX such as boost the number of issuers and investors, especially domestic ones. Currently there are about 1.3 million investors in the capital market and about 60 percent are domestic investor. Half more still invest in mutual funds.
Another challenge is how the bourse to expand the range of capital market products. The diversification of products and the deepening of financial markets will be an attraction for investors, including foreigners.
In addition, the self regulatory office also needs to facilitate the existence of liquidity buffer aimed to preventing the decline in stock prices of newly-listed company. The next challenge is to ease the annual listing costs.
The new director of IDX has announced to bring 70 new companies listing at the Indonesia’s capital market of 70 companies until 2020. So far number of issuers listed on the stock exchange around 25 to 30 companies every year. As for 2020, the IDX target is raised to 40 companies.
During Sulistio’s leaderships period, the number of new companies that go IPO reached 92 companies. Last year became the year with the largest number of IPOs as many as 37 companies.
The new chief of IDX should improve the IPO’s regulation, mainly because many small company like start up still aren’t able to capitalize fund from bourse. The regulation is considerable still too tight for them.
In addition, the new chief should able to maintain its investor growth through education and socialization. The 106-year-old IDX currently only had 1.12 million registered investors as at Dec. 20, 2017, this is far away compared to Singapore bourse for example.
Furthermore, the biggest challenges for the new director on the global market movement that give lot of pressures to the local market. The right-policy is needed to avoid the stock market volatility and give confidence to the market.
We believed that the new directors are people who have been tested with a good track record. They are professionals and already has lot of experiences across the capital market.
We also confident that Djajadi and his team have a specific strategy and a clear focus on advancing the domestic capital market, in order to catch up with us compared to the regional bourse.