Suspend in Indonesia Stock Exchange

Indonesia stock exchange (Bursa Efek Indonesia/BEI) suspend by government at October 10, 2008. This policy has taken cause composite index (IHSG) drop more 20%. Based on theory, we can see that return extreme just more 5% in a day. Investor were panic when heard negative issue about American Economic and sell their stock at any cost. By suspend trading in IDX, we hope stock trading in Indonesia can be stable.

In this recent years, performance IDX are very impressive. Is Asia, performance IDX are include the big five and composite stock index increase very-very good. But, the performance did not match with economic growth in Indonesia. The government should be study it, and refers to history economic in Indonesia. In 1995, some of expert economy in Indonesia, i.e. Kwik Kian Gie, Rizal Ramli and Syahrir, ever said that economic growth in Indonesia (about 1990s) are very risky because did not balancing with growth economic in base level. That growth is likely to die in a minute, and we see, in 1997 Indonesian economic were collapse.

And now, is happen again. In this time, performance in IDX, that very impressive, actually did not reflect to Indonesia economic. Maybe, just there a money that drop in for a while in IDX. So, that money just take a holiday in IDX, not invested by investor. Now the investor need more money to saving their assets in America, so, the take their money from IDX and stock composite index become drop down.

In China, that a regulation to control ownership of the company. Foreign investor forbid to have ownership more than 50%. So, they put and take their money controllable. In Indonesia, there are not regulation like this, so foreign investor have access to ownership more 50% (majority). In fact, they can to put or take their money uncontrollable, and the result, we can to see now in IDX.