Recovering Stock Performance, Stock “Short Selling” And “Buyback” Rules Reviewed

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Recovering Stock Performance, Stock “Short Selling” And “Buyback” Rules Reviewed

Thursday, 06 Mar 2025

Capital market regulators discussed with owners of public companies and market players regarding the volatility of the Composite Stock Price Index (IHSG) in recent months. Policy evaluations were carried out to maintain stock market liquidity which was under pressure due to the outflow of foreign investor funds.

The Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) held a dialogue event at the IDX Main Hall, Jakarta, on Monday (3/3/2025) afternoon until the time to break the fast. A number of market players, from issuer owners and management, exchange members, to media leaders, were invited to the discussion.

The Chief Executive of the Capital Market Supervisory, Derivative Finance, and Carbon Exchange of OJK Inarno Djajadi explained that from the discussion they captured the concerns of stakeholders in the capital market, especially regarding the pressure on the IHSG recently.

"Therefore, OJK will take an initial policy to, first, postpone the implementation of short sell activities. In addition, there are other policy options if needed, namely reviewing share buybacks without a GMS (general meeting of shareholders), while still paying attention to and considering the situation and conditions that occur later," said Inarno in a press conference after the discussion.

The implementation of short selling with an intraday scheme was previously planned to start in March or April 2025. This trade is carried out when traders sell shares when the price is high and buy them back when the price falls at the end of trading on the same day. This product was postponed because it has the potential to increase supply amid low demand.

On the other hand, the buyback policy or repurchase of investor shares by the company is expected to increase share prices so that demand soars. This policy is made easier by allowing buybacks without asking for investor agreement through a GMS.

The two policy evaluations, Inarno continued, focus on three things, namely market stability, increasing liquidity, and also protecting retail and institutional investors.