IDX Adds 'Price Impact Ratio' Criterion for High Shareholding Concentration Stocks

“This is part of the ongoing reforms we continue to carry out to ensure orderly, fair and efficient transactions remain available on the Indonesia Stock Exchange.”

Jakarta (ANTARA) - PT Bursa Efek Indonesia (IDX) has added a Price Impact Ratio criterion for determining which shares with a market capitalisation above Rp10 trillion fall into the High Shareholding Concentration (HSC) category.

“We are adding one criterion, namely the Price Impact Ratio criterion, for all shares with a market capitalisation above Rp10 trillion. For shares with a high Price Impact Ratio, screening will be conducted for indications of High Shareholding Concentration or otherwise,” said IDX Chief Executive Officer Jeffrey Hendrik during a press conference at the IDX building in Jakarta on Tuesday.

Jeffrey explained that the Price Impact Ratio takes into account the share’s price movement relative to its velocity, which is calculated from the average transaction volume against the number of shares available to the public (free float).

This means shares with low transaction volume activity will naturally produce low velocity, and with low velocity but large price movements, the result will be a high Price Impact Ratio.

“It is on these shares that we will conduct screening for the potential existence of High Shareholding Concentration. Certainly, other trigger factors related to supervisory activities will continue to be carried out,” said Jeffrey.

He explained that the Price Impact Ratio criterion for all shares with a capitalisation above Rp10 trillion will be applied periodically every three months, following the evaluation cycle of the main indices on the IDX.

Alongside the new criterion, Jeffrey revealed that 37 shares have newly entered the HSC category, bringing the total number of HSC shares to 51, up from 14 previously.

The IDX will shortly announce the 51 shares in the HSC category.

“This is part of the ongoing reforms we continue to carry out to ensure orderly, fair and efficient transactions remain available on the Indonesia Stock Exchange,” he said.