JAKARTA: The Indonesia Stock Exchange (IDX) is looking to increase the number of individual investors in local equities by 200,000 this year.
The IDX is pursuing a policy of persuading savers to invest in stocks in a country where only a miniscule proportion of the population invests in stocks.
“We want to shift the trend in society from a ‘savings society’ to an ‘investment society’ by gradually educating the public on how to invest properly,” IDX development director Nicky Hogan said on Monday.
Currently less than 1 percent of Indonesians invest in the stock market. As of January, the bourse had only 440,627 single investor identities (SID) invested in shares and 271,840 SID invested in mutual funds, according to Indonesian Central Securities Depository (KSEI) data.
Nicky said that in order to attract 200,000 more individuals into investing in the stock market this year, the bourse had set up several programs, including “Pesta Reksa Dana”, a mutual fund exhibition running from Jan. 27 – 30 at the IDX building.
“This week’s expo is a continuation of our ‘Let’s invest in stocks’ campaign. We hope to see 4,000 visitors in total, 50 percent of whom are targeted to buy the products on the spot,” he said.
Pesta Reksa Dana will be open for free to the public with 42 banks, investment managers and securities firms taking part selling financial products.
The IDX and the Financial Services Authority (OJK) last year began the “Let’s invest in stocks” (“Yuk, menabung saham”) campaign, inaugurated by Vice President Jusuf Kalla, to raise awareness about routine investment in stocks as opposed to traditional savings in banks.
The IDX also operates information centers in more than a dozen cities across the archipelago and over 100 IDX galleries at universities.
Many analysts have attributed the low participation by individual investors, or retail investors, to a lack of knowledge of the importance of the capital market in their investment planning.
OJK data show that the market recorded an 11 percent increase in net asset value of mutual funds from around Rp 241.57 trillion (US$17.4 billion) in 2014 to Rp 268.44 trillion in 2015.
KSEI managing director Friderica “Kiki” Widyasari said that although the number of single investors was not great, mutual fund trends showed an improvement, especially considering the volatility of the stock market last year.
Kiki said that increasing individual investors and investment value would be a Herculean task as the stock market still competed with banks that offered time-deposit products with high interest rates, compared with developed countries that offered only low interest rates to depositors.
Wellson Lo, founder of local stock analytical social network Stockbit.com, suggested that the IDX should reach out to more potential customers such as employees and young businesspeople as many did not know how to invest or were not comfortable with the risks.