Jakarta (VNA) – The Indonesia Stock Exchange (IDX) has announced a new trading policy to prevent stocks from falling more than 10 percent after the Jakarta Composite Index (JCI) crashed to a three-year low on March 9.
The JCI plunged 6.58 percent and closed the day at 5,136.81 points, the lowest level since December 2016, amid concerns over the wide spread of the COVID-19 outbreak.
The new “auto-rejection” policy, effective from March 10, caps stock prices to drop a maximum of 10 percent for stocks at all price ranges. Stocks priced from 50 – 200 IDR (0.3 – 200 USD) can gain a maximum of 35 percent in value while those ranging from 200 – 5,000 IDR, 10 percent; and those higher than 5,000 IDR, 20 percent.
On March 9, the Indonesian Financial Services Authority (OJK) also announced it would allow listed companies to buy back shares up to 20 percent of paid-up capital without a prior shareholders meeting to ease market volatility.
It is as an effort to stimulate the economy and reduce the impact of the significantly fluctuating market, the OJK said in a statement.
The IDX has lost 18.46 percent of its value so far this year with market capitalization declining to 5.94 quadrillion IDR (412.4 billion USD) from 7.26 quadrillion IDR at the end of last year.
The index has dropped more than 22 percent from its record high in February./.
The JCI plunged 6.58 percent and closed the day at 5,136.81 points, the lowest level since December 2016, amid concerns over the wide spread of the COVID-19 outbreak.
The new “auto-rejection” policy, effective from March 10, caps stock prices to drop a maximum of 10 percent for stocks at all price ranges. Stocks priced from 50 – 200 IDR (0.3 – 200 USD) can gain a maximum of 35 percent in value while those ranging from 200 – 5,000 IDR, 10 percent; and those higher than 5,000 IDR, 20 percent.
On March 9, the Indonesian Financial Services Authority (OJK) also announced it would allow listed companies to buy back shares up to 20 percent of paid-up capital without a prior shareholders meeting to ease market volatility.
It is as an effort to stimulate the economy and reduce the impact of the significantly fluctuating market, the OJK said in a statement.
The IDX has lost 18.46 percent of its value so far this year with market capitalization declining to 5.94 quadrillion IDR (412.4 billion USD) from 7.26 quadrillion IDR at the end of last year.
The index has dropped more than 22 percent from its record high in February./.
VNA
