The Indonesia Stock Exchange (IDX) categorizes stocks into several Listing Boards, aka stock trading boards. The goal is none other than to help market participants make the right investment decisions.
The group of stocks on each Listing Board has different criteria and risk levels. Therefore, this Exchange service is one of the references for managing investment risk.
Definition of Watchlist Board
One of the Listing Boards on the IDX is the Watchlist Board. The board contains stocks whose issuers experience a number of fundamental and trading liquidity constraints according to IDX regulations (see Implementation of Watchlist Board Phase II press release). The stock may come out of the Exchange's watchlist if the obstacle has been resolved.
Stocks on the Watchlist Board are given a special notation X and are traded by periodic call auction (trading mechanism with bid and ask quotations that match only at certain hours, the last price is then determined based on the largest trading volume).
Watchlist Stock Criteria
There are 11 criteria for stock in the Watchlist Board. A stock can have one or more criteria.
Criteria | Description |
1 | The average price of on the Regular and/or Regular Periodic Call Auction Market is less than Rp51.00 and has low liquidity with the daily average transaction value of shares less than Rp5,000,000.00 (five million rupiahs) and the daily average transaction volume of shares is less than 10,000 (ten thousand) shares for the last 3 (three) months. |
2 | The latest Audited Financial Statements received a disclaimer opinion. |
3 | No revenue or there is no change in revenue in the latest Audited Financial Statements and/or Interim Financial Statements compared to the previously submitted financial statements. |
4 | A Listed Company which is a mining company or the parent of a mining company that has not generated any revenue from their core business until the 4th (fourth) fiscal year since being listed on the Exchange. |
5 | Having negative equity in the latest financial statement. |
6 | Does not meet the requirements to remain listed on the Exchange as regulated in regulation I-A and I-V, except meet with free float provision at least 50.000.000 (fifty millions) for Main Board and Development Board and more than 5% (five percent) of total listed stocks for the Main Board, Development Board and Acceleration Board. |
7 | Having low liquidity with an average daily transaction value of stocks less than IDR5,000,000.00 (five million rupiahs) and an average daily transaction volume of stocks less than 10,000 (ten thousand) shares during the last 3 (three) months in Regular and/or Regular Periodic Call Auction Market. |
8 | The Listed Company is facing an application of Suspension of Debt Payment Obligations, bankruptcy, or homologation cancellation. |
9 | The Listed Company has a subsidiary company with material revenue contribution that is facing an application of Suspension of Debt Payment Obligations, bankruptcy, or homologation cancellation. |
10 | Subjected to temporary suspension for more than 1 (one) exchange day due to trading activities. |
11 | Other conditions determined by the Exchange after obtaining approval or order from the Financial Services Authority (OJK). |
The list of stocks in the Watchlist Board can be viewed through the IDX's official website which is updated regularly whenever there are new stocks entering or exiting.
The Opportunity Behind the Risk
Stocks on the Watchlist Board usually attract investors with a high risk profile who tend to make bold decisions. Aggressive investors see these stocks as an opportunity to earn huge profits in a short period of time despite the very high risk (speculation).
By capitalizing on volatility and uncertainty, an investor can implement strategies that focus on increased liquidity, sharp price fluctuations, and rapid swings.
Disclaimer: The content is made for educational purposes, not a recommendation to buy or sell a particular stock. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (OJK).
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