Narasi.net — Moderna market is one of Moderna’s economic bases in any country, even in Indonesia. Moreover, the number of domestic investors in the Indonesia Stock Exchange (IDX) is also the acquisition of shares of large companies by Indonesian citizens.
The larger the number of investors in Indonesia and the larger the domestic funds invested, the less influence the funds contributed by foreign investors will have on the country’s economic conditions.
On the other hand, if the number of domestic investors is low and most of the participants in the capital market are foreign funds, the Indonesian economy will easily falter when foreign funds known as “hot money” are withdrawn abroad.
Well, in connection with this, there are two important facts that you need to know. First of all, the data on the current number of investors in Indonesia. Second, the comparison of ownership of local and foreign investors.
The Number of Investors in Indonesia Has Just Reached 1 Million
According to data from the Indonesian Central Securities Depository (Ksei) which registers ownership of a single Investor Identification number (SID), the number of investors in Indonesia alone reached 1.36 million people in July 2018. This figure is an increase of 33.59 percent compared to the number of small island developing countries. as of July 2017, which is only 1.02 million.
There are several factors that encourage the increase in the number of investors in Indonesia, including:
- The savings campaign is carried out by the Indonesia Stock Exchange (IDX) and related institutions.
- The opening of stock market corners at public and private universities throughout the archipelago, not only at top-level universities.
- Capital market schools (SPM) and Islamic Capital Market Schools (SPM) are held in big cities such as Jakarta, Surabaya, Semarang, Medan, etc., on a monthly basis.
- The minimum initial capital for capital investment is reduced to Rs. 100,000. This allows anyone, from all walks of life, to open securities accounts, including students.
Is Local Investor Ownership Rising Rapidly?
According to the BEI report, the share of domestic ownership in the capital market in 2013 was only 37.08 percent, while foreign ownership controlled 62.94 percent.
However, according to the KSEI report through the Financial Services Authority (OJK) recently published by Kontan, as of March 9 2018, the share of foreign ownership in the capital market fell to 44.45 percent, while domestic ownership grew to 55.55 percent.
At first glance, there seems to be a rapid increase among local investors. However, the reality is different. Especially for equity instruments (shares), foreign ownership continues to dominate. On 9 March 2018, Total Foreign Capital Ownership amounted to Rs. 1,986. 89 trillion, while local equity holdings were slightly lower at Rs. 1975.63 billion.
Why is the proportion of foreign ownership even higher, despite the fact that the number of investors in Indonesia is increasing? First of all, the number of investors in Indonesia reported by KSEI may also include foreign nationals. Second, perhaps because most local investors in Indonesia are beginners.
The tendency of novice investors to invest with small capital in stocks at lower prices. On the other hand, more experienced foreign investors usually target superior stocks that have better fundamental conditions, even though they are more expensive.
As a result of this large proportion of foreign ownership, the share prices of domestic companies and the Indonesian capital market index are easily disturbed by foreign sentiment.
As soon as there is good news from the United States, for example, foreign funds will immediately launch a sell-off on the IDX and run overseas. This phenomenon can only be stopped if the number of domestic investors who understand the intricacies of investing in stocks and investing large funds on the IDX has increased significantly, more than the current number.