Capital Markets
From The Report: Indonesia 2017
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While 2015 was widely regarded as a rough patch for Indonesia’s capital markets, on a medium- and long-term basis the market has posted significant growth. From 2005 through to the end of 2015, the Jakarta Composite Index (JCI) – the market benchmark for the Indonesia Stock Exchange – rose around four-fold, or 15% per annum, according to data provided by the exchange. Indeed, over the past decade the MSCI Indonesia has outperformed not only other ASEAN bourses, but emerging markets and MSCI World as well.

This chapter contains interviews with Muliaman Hadad, Chairman, Financial Services Authority; and Tito Sulisito, CEO, Indonesia Stock Exchange.

Articles from this Chapter

Overview

Across the board: Efforts to bring new investors and listings onto the market bode well for future growth
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While 2015 was widely regarded as a rough patch for Indonesia’s capital markets, on a medium- and long-term basis the market has posted significant growth. From 2005 through to the end of 2015, the Jakarta Composite Index (JCI) – the market benchmark for the Indonesia Stock Exchange’s (IDX) – rose around four-fold, or 15% per annum, according to data provided by the exchange. Indeed, over the past decade the MSCI Indonesia has outperformed not only other ASEAN bourses, but emerging markets…

Interview

Lending a hand: OBG talks to Muliaman Hadad, Chairman, Financial Services Authority (OJK)
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Interview:Muliaman Hadad What role can financial services play in accelerating the country’s growth? MULIAMAN HADAD: The credit-to-GDP ratio for Indonesia is the lowest in the ASEAN region. This means there is a lot of room for expansion in credit, which will facilitate growth. Other metrics such as market capitalisation to GDP and insurance penetration to GDP are all low compared to our neighbours, which means there is considerable room for growth. We can do this through developing these…

Interview

Going public: OBG talks to Tito Sulistio, CEO, Indonesia Stock Exchange
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Interview:Tito Sulistio What is the outlook for the Indonesia Stock Exchange, and where does it stand against other exchanges in the region? TITO SULISTIO: If we look at the market capitalisation to GDP ratios of other Asian nations, the figure is sometimes over 100%. Although the same ratio only stands at 40% in China, this percentage doubled in just a year. We don’t have many listed companies, despite the fact that Indonesia has the highest number of firms with the potential to be listed.…

Analysis

Diversifying market: The exchange moves to attract new listings from a wide range of segments
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In recent years authorities at the Indonesian Stock Exchange (IDX) and government officials have made a concerted effort to attract new listings to the country’s bourse. With 529 total listed companies as of the first half of 2016, the IDX is among the smallest exchanges in the region by number of market participants, despite Indonesia’s status as the largest economy in South-east Asia. In 2015 just 16 firms carried out initial public offerings (IPOs) on the IDX, down from 19 in 2014 and 30 in…

Analysis

Asset-backed securities: A primer on different securities in use in the sector
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Two types of asset-backed securities (ABS) can be listed on the Indonesia Stock Exchange (IDX): a collective investment contract of asset backed securities (CIC-ABS), and asset-backed securities in the form of participatory certificates (ABS-PC). Definition A CIC-ABS is an agreement between an investment manager and a custodian bank that binds ABS holders by authorising the investment manager to manage the collective investment portfolio and the custodian bank to collective custody services. ABS-PC are asset-backed securities issued by issuers, whose portfolios are pools of receivables that serve as proof of proportional ownership over…

Analysis

Sharia capital market: Rules regarding investing in sharia-compliant financial products
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As the most populous Muslim country in the world, Indonesia is in a unique position to provide sharia-compliant financial products and services to its citizens and to an international customer base. Sharia financial products and services are regulated by the country’s Financial Services Authority (OJK). Fatwas (Islamic rulings) issued by the National Sharia Board-Indonesian Council of Ulema help to establish correct practices, as long as said fatwas do not contradict regulations set for forth by the OJK. Sharia securities, which are defined under the Capital Market and Financial Institution Supervisory Agency Regulation No. IX.A.3, must fit…