IDX-IC Classification: Definition, Differences with JASICA, List of Sectors, and Stock Examples
IDX-IC or IDX Industrial Classification is the latest sector classification system used by the Indonesia Stock Exchange (BEI), replacing the old system known as JASICA.
According to Kontan, BEI officially launched the IDX-IC classification on 25 January 2021, which will replace the JASICA (Jakarta Stock Industrial Classification). However, the JASICA classification will still be maintained during a three-month transition period.
This means that by 2026, BEI will fully use the IDX-IC classification. So, what is the IDX-IC classification? What are the differences with the JASICA classification that BEI has used since 1996? Let’s take a closer look!
What is the IDX-IC Classification?
The IDX-IC classification is a system for grouping listed companies on the Indonesia Stock Exchange based on their primary business activities. IDX-IC groups issuers into four levels: sector, sub-sector, industry, and sub-industry.
With the IDX-IC classification structure, listed issuers will be more homogeneous, comprising 12 sectors, 35 sub-sectors, 69 industries, and 130 sub-industries. This system is designed to:
Provide classification more relevant to modern economic conditions
Follow global standards
Facilitate sector analysis for investors
The IDX-IC classification was officially implemented on 25 January 2021 in accordance with BEI Circular Letter No: SE-00003/BEI/01-2021 regarding the Display of Listed Company Information in the Remarks Column in JATS.
Since then, all companies registered with BEI have used this new classification, replacing the previous JASICA system.
There are several reasons why BEI replaced JASICA with the IDX-IC classification, namely:
Does Not Accommodate Digital Technology Developments
Since JASICA only divides companies into nine main sectors with relatively general divisions, it is not relevant to the complex developments of the modern industry.
When JASICA was created, the digital economy had not developed as it has now. As a result, there are no specific categories for e-commerce, data centres, digital platforms, and others.
Yes, amid current technological developments, companies certainly have various innovative business models such as digital technology, creative economy, or renewable energy. A single sector can contain various different businesses.
If still relying on JASICA, technology companies might be “forced” into the trade or services sector. Consequently, the analysis becomes inaccurate. For example, stocks like GOTO or DCII are difficult to classify accurately under JASICA.
Not Aligned with Global Standards
In the current era, JASICA does not fully follow international standards such as GICS (Global Industry Classification Standard) and ICB (Industry Classification Benchmark).
GICS (Global Industry Classification Standard) is a global industry classification system for grouping companies based on primary business activities. The GICS classification was developed by MSCI.
Meanwhile, ICB (Industry Classification Benchmark) is a global industry classification system for grouping companies based on primary revenue sources. The ICB classification was developed by FTSE Russell.
If JASICA is not aligned with global standards, foreign investors will find it difficult to compare issuers. For example, foreign investors will compare technology stocks in Indonesia with technology stocks in the US.
Technology stocks in the US are certainly in the Technology sector under GICS, but in Indonesia, using the JASICA classification, technology issuers might even fall into trade, services, or other sectors.
As a result, those foreign investors will be confused: “Is this actually a technology company or not?” which makes them hesitant to invest further and hinders the potential inflow of foreign funds.
Here is a comparison table between the two classification systems, IDX-IC and JASICA:
So, it can be concluded that IDX-IC is far more modern and relevant to current technological developments.
Under the IDX-IC classification, companies on the Indonesia Stock Exchange are divided into 12 main sectors based on their primary business activities. See the breakdown below!
- Energy (IDXENERGY)
The energy sector includes companies engaged in the exploration, production, and distribution of energy sources, both fossil fuels and some alternative energies. Its scope covers coal, oil & gas, and energy support services.
Examples of Issuers:
ADRO – Adaro Energy Indonesia Tbk
PTBA – Bukit Asam Tbk
ITMG – Indo Tambangraya Megah Tbk
MEDC – Medco Energi Internasional Tbk
*Click on the stock code to see the latest stock prices.
- Basic Materials (IDXBASIC)
This sector contains companies that produce raw or semi-finished materials used by other industries. Its scope includes metal mining such as nickel, gold, and tin, petrochemicals, pulp & paper, and cement.
This sector also relies on global industry demand, especially nickel and CPO, which will be affected by global market prices. This sector serves as a leading indicator in the country’s economy.
Examples of Issuers:
ANTM – Aneka Tambang Tbk
INKP – Indah Kiat Pulp & Paper Tbk
TPIA – Chandra Asri Petrochemical Tbk
SMGR – Semen Indonesia Tbk
*Click on the stock code to see the latest stock prices.
- Industrials (IDXINDUST)
This sector includes companies that support industrial activities and development. Its scope covers heavy equipment, construction & EPC (Engineering, Procurement, and Construction), industrial logistics, and engineering services.
This sector is usually related to the implementation of government or private projects, thus depending on infrastructure budgets.
Examples of Issuers:
UNTR – United Tractors Tbk
WIKA – Wijaya Karya Tbk
PTPP – PP Tbk
WEGE – Wijaya Karya Bangunan Gedung Tbk
*Click on the stock code to see the latest stock prices.
This sector contains companies whose products are still needed in any economic condition.