Indonesia Stock Market Recovering as Pandemic-Era Restrictions are Over

Indonesia’s financial services authority known as OJK (Otoritas Jasa Keuangan) will finally ease some pandemic-era rules for the stock market including trading and short selling as the situation in the pandemic is getting better. The new regulation will gradually take place by the end of this month.

In the letter sent by Inarno Djajaldi, head of capital market supervision at OJK, said that as the government removed all coronavirus-related mobility restrictions last year, OJK will do the same regarding the stock market restrictions. An official at the regulator authenticated the letter, but has not commented any further.

According to the letter, there are around five restrictions that will be taken off. The first would be that short selling is allowed again for a list of stocks that were previously suspended. The second is the increased threshold of which trading is halted for 30 minutes from a 5% drop to a 10% drop in the main index.

The third is that pre-pandemic auto rejection rules will be back. Auto rejection is a limit to how much share prices can go up or down in a day. Previously in the high pandemic season, OJK set the limit that share prices cant go below 7%, while there is no upper limit. Now that the auto rejection limit is back, it will begin at 20% up to 35% depending on the stock prices.

The fourth restriction that will be lifted is that trading hours will be adjusted to match the central bank’s settlement things. However, it is not clear whether the time will be back to 04:00 p.m. Jakarta time (09:00 GMT) like before or not. As of now, the market closes one hour earlier at 03:00 p.m.

Finally, The policy of relaxing the time period for the validity of financial reports and appraisal reports used for public company corporate actions, which was previously set, has been extended to a maximum of 7 months.

source: CNA, Kontan.co