Capital Markets

Indonesia’s capital markets have been on a steady growth path in recent years, with market capitalisation and trading activity showing strong expansion since 2012. Meanwhile, the number of initial public offerings (IPOs) on the Indonesia Stock Exchange (IDX) reached a 26-year high in 2018. Debt markets have been resilient despite widespread global volatility, which prompted significant outflows from emerging markets that year. Nonetheless, some challenges remain for stakeholders: factors such as illiquidity, potential election shocks and stringent regulatory requirements continue to weigh on domestic companies’ market participation. The authorities are seeking to encourage more IPOs and boost broader market liquidity, although regulatory challenges and elevated listing fees continue to impede progress.A planned small and medium-sized enterprise board has yet to be established. New regulations surrounding cryptocurrency trading could also affect plans to diversify IDX product offerings, even as reforms help the sector maintain its upward trajectory in 2019. This chapter also contains an interview with Inarno Djajadi, President Director, Indonesia Stock Exchange.