Jakarta Stock Exchange (IDX): History & Overview

The Jakarta Stock Exchange (JKSE) was a stock exchange in Jakarta, Indonesia. In Indonesia, the exchange was called “Bursa Efek Jakarta” or BEJ. The exchange later merged with Surabaya Stock Exchange, ultimately creating the Indonesia Stock Exchange or IDX.

Summary

• The Jakarta Stock Exchange (JSX) was a stock exchange in Jakarta, Indonesia.
• The Jakarta Stock Exchange first opened in 1912, when Indonesia was still a Dutch colony. The exchange encountered numerous closures during the First and the Second World Wars and officially reopened in 1977.
• In 2007, the Jakarta Stock Exchange merged with the Surabaya Stock Exchange and formed the Indonesian Stock Exchange.

History of the Jakarta Stock Exchange

The Jakarta Stock Exchange first opened in 1912, when Indonesia was still a Dutch colony. The exchange encountered numerous closures during the First and the Second World Wars and officially reopened in 1977. The exchange was managed by “Badan Pengawas Pasar Modal or Bapepam,” which was a supervisory agency for capital markets. “Bapepam” reported to the Ministry of Finance in Indonesia.

Trading activity and overall market capitalizationMarket CapitalizationMarket Capitalization (Market Cap) is the most recent market value of a company’s outstanding shares. Market Cap is equal to the current share price multiplied by the number of shares outstanding. The investing community often uses the market capitalization value to rank companies saw an increase in conjunction with the country’s private sector and financial markets developments. In 1992, under the ownership of Jakarta Exchange Inc., the Jakarta Stock Exchange was privatized. The privatization of the JSX led to a change in the functions of “Bapepam,” which then became the Capital Market Supervisory Agency. In 1995, the JSX released an automating trading system called the Jakarta Automated Trading System or JATS.

In 2007, the Jakarta Stock Exchange merged with the Surabaya Stock Exchange and formed the Indonesian Stock Exchange.

Key Stock Indices of the JSX

The key stock market indices used to report and estimate value variations in stock classes or groupings are the Jakarta Islamic Index (JII) and the JSX Composite. The JSX Composite is now known as the IDX Composite and serves as an index for the stocks listed on the Indonesian Stock Exchange. As of March 2016, 532 companies were listed on the Indonesia Stock Exchange.

The Jakarta Islamic Index, or JII, was initiated in 2002 to serve as a benchmark for estimating market variations based on the Sharia or Islamic LawSharia LawSharia law is a religious law that lays down governing principles for spiritual, mental, and physical behavior that must be followed by Muslims.. In 2004, there were approximately 30 stocks listed on the Jakarta Islamic Index.

Surabaya Stock Exchange (SSX)

The Surabaya Stock Exchange (SSX) or “Bursa Efek Surabaya (BES)” in Indonesian was a stock exchange opened in 1989 with only 36 shareholders. The main objective for establishing the SSX was to provide support to the Indonesian government concerning capital marketsCapital MarketsCapital markets are the exchange system platform that transfers capital from investors who want to employ their excess capital to businesses and economic enhancement. The SSX later merged with the JSX to create the IDX. The SSX traded various instruments and products, such as stocks/equities, bonds, and derivatives.

Indonesia Stock Exchange (IDX)

The Indonesia Stock Exchange (IDX), also known as “Bursa Efek Indonesia” in the local language, is headquartered in Jakarta, Indonesia. The IDX was created as a result of the merger between the SSX (Surabaya Stock Exchange) and the JSX (Jakarta Stock Exchange). As of 2019, 656 companies were listed on the IDX.

The Indonesia Stock Exchange, like the JSX, makes use of the Jakarta Composite Index and the Jakarta Islamic Index (JII) as key stock indices. The IDX also oversees individual indices, i.e., Main Board and Development Board Indices, Sector Stock Price Index, and the LQ 45 Index.

In 2011, the IDX launched a new index known as the Indonesia Sharia Stock Index (ISSI). The ISSI consists of 214 stocks. The stocks were all screened by the Indonesia Ulema Council. As of 2019, the Indonesia Stock Exchange experienced a 53% rise in investors in conjunction with an increase in average daily transaction value of greater than 7%.

The IDX operates with a focus on infrastructure provision to enable efficient, fair, methodical, and legally compliant trading.

More Resources

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