A reflection and contemplation.

What is the Indonesian Capital Market and What are the Challenges of the Indonesian Capital Market from 1995 to 2025?

The challenges of the Indonesian Capital Market from 1995 to 2025 include several factors, including:

• Global economic crisis: Global economic crises such as the 1997 Asian financial crisis, the 2008 global financial crisis, and the 2020 COVID-19 pandemic have affected the Indonesian capital market.
• Dependence on foreign investment: The Indonesian capital market is highly dependent on foreign investment, so changes in global economic conditions can affect market performance.
• China's economic slowdown: A slowdown in the Chinese economy could impact Indonesian exports and capital market performance.
• Donald Trump's policies: Donald Trump's protectionist policies could impact international trade and the performance of the Indonesian capital market.
• Global geopolitical dynamics: Geopolitical conflicts such as the Russia-Ukraine war and Middle East tensions can affect the global capital market, including Indonesia.
• Factor X: Shock factors such as the COVID-19 pandemic can significantly impact the capital market.
• Indonesia's capital market reforms from 1995 to 2008 included several important steps, including:

Law Number 8 of 1995 concerning Capital Markets served as the primary legal basis for Indonesia's capital market reforms. These reforms aimed to increase credibility, competitiveness, and investor confidence in the Indonesian capital market.

• Trading Automation: Implementation of the Jakarta Automated Trading System (JATS) to improve transaction efficiency.
• Scripless Trading: Eliminating the use of physical documents in stock transactions.
• Remote Trading System: Allowing investors to conduct transactions remotely.
• Stock Exchange Merger: The merger of the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX) into the Indonesia Stock Exchange (IDX) in 2007.

Indonesia's capital market reforms from 2008 to 2015 included several important steps, including:

• Stock Exchange Merger: The merger of the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX) into the Indonesia Stock Exchange (IDX) in 2007, which became effective in 2008.
• Improved Transparency: Increased transparency of share ownership and shareholder disclosure.
• Strengthening Share Ownership Data: Strengthening more granular and reliable share ownership data.

Indonesian capital market reforms from 2016 to present and the need for future Indonesian capital market reform:

Indonesian capital market reform aims to increase credibility, competitiveness, and investor confidence in the Indonesian capital market. Some strategic initiatives that can be undertaken include:

• New Free Float Policy: Raising the minimum free float limit for issuers to 15% in line with global standards, applicable to new IPO issuers and existing issuers undergoing a transition period.
• Strengthening Share Ownership Data: Increasing share ownership transparency by grouping them based on investor categories.
• Stock Exchange Demutualization: The demutualization process of the Indonesia Stock Exchange (IDX) to enhance independence and professionalism.
• Regulatory Enforcement and Sanctions: Improving regulatory enforcement and sanctions against legal violations, including stock transaction manipulation and misleading information.
• Issuer Governance: Mandatory continuing education for Directors/Commissioners/Audit Committees and CA (Certified Accountant) certification for issuer financial report preparers.
• Market Deepening: Accelerating market deepening initiatives, from the demand, supply, and infrastructure sides.
• Collaboration and Synergy: Increasing collaboration and synergy with stakeholders to accelerate capital market integrity reform.

Several discussions and updates on the need for transformation of the Indonesian capital market.

• AB for the development of the Indonesian capital market
• Potential for the Development of the Indonesian Capital Market

Dr. Adi Budiarso
@abefinomics