JakartaThe Indonesia Stock Exchange’s (IDX) market capitalization ended the week at 11,825 trillion rupiah ($729.94 billion), down 4.35 percent from last weekend’s 12,363 trillion rupiah.
The Jakarta Composite Index (IHSG) recorded a significant decline of 3.48% from 7,222.382 to 6,970.736 during the period from 27-31 May 2024.
The introduction of full call auctions (FCA) in IDX was the main factor behind the index dropping below the 7000 level. Barito Renewables Energy (BREN), the largest by market cap, was heavily affected by the FCA.
“BREN’s inclusion in the special monitoring committee has caused the stock index to fall by more than 1 percent in the past few days,” said Budi Frensidi, a market analyst and professor at the University of Indonesia’s Faculty of Economics and Management.
On March 25, the IDX began implementing the second phase of the FCA policy, which was designed to strengthen investor protections, but the policy was perceived as destabilizing and led to a sharp decline in the stock index.
The implementation of the FCA’s action against BREN shares sparked a strong reaction from investors as it came shortly after the company was included in the large cap category of the Financial Times Stock Exchange (FTSE) Global Equity Index, effective from June 2024.
Trading in BREN shares resumed on Wednesday after a two-day halt, the same day BREN was placed on the IDX’s special monitoring committee and is required by FCA policy to conduct five regular daily auctions for 30 days.
BREN has fallen nearly 30% over the past three days, with shares dropping 10% on Wednesday, 9.8% on Thursday and 9.8% on Friday.
Meanwhile, the average daily trading value increased 49.01 percent to Rp18.12 trillion from the previous week’s Rp12.16 trillion, while the average daily trading volume increased 34.47 percent to 20.729 billion shares from 15.415 billion shares.
On Friday, foreign investors recorded net selling of Rs 66.58 billion.
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