This year, the Indonesia Stock Exchange (IDX) is normalizing its trading policies in the capital market, in line with the increasingly controlled pandemic situation.
One of its new policies is the adjustment of the lower Auto Rejection (ARB) limit.
ARB is a restriction on the daily price decline of a stock on the exchange. Meanwhile, the upper Auto Rejection (ARA) is a restriction on price increases.
Trading of a stock will be automatically halted if its price falls to the ARB limit in a single day.
Similarly, if the price rises to the ARA limit, the stock transaction will be stopped by the IDX until the next trading day.
From the beginning of the pandemic until the end of May 2023, the IDX set a variable ARA limit with a uniform ARB. The details are as follows:
* Stocks priced at Rp50-Rp200: ARA limit 35% and ARB 7%
* Stocks priced at >Rp200-Rp5,000: ARA limit 25% and ARB 7%
* Stocks priced at >Rp5,000: ARA limit 20% and ARB 7%
However, starting in June 2023, the ARB limit will be gradually increased to the same level as the ARA in each group. When the ARB level is the same as the ARA, the condition is called Symmetrical Auto Rejection.
The details of the new provisions are as follows:
Phase I Adjustment (effective June 5, 2023):
* Stocks priced at Rp50-Rp200: ARA limit 35% and ARB 15%
* Stocks priced at >Rp200-Rp5,000: ARA limit 25% and ARB 15%
* Stocks priced at >Rp5,000: ARA limit 20% and ARB 15%
Phase II Symmetrical Auto Rejection Adjustment (effective September 4, 2023):
* Stocks priced at Rp50-Rp200: ARA limit 35% and ARB 35%
* Stocks priced at >Rp200-Rp5,000: ARA limit 25% and ARB 25%
* Stocks priced at >Rp5,000: ARA limit 20% and ARB 20%
"The adjustment of the lower Auto Rejection (ARB) percentage limit is carried out gradually with an implementation that considers future market conditions," said the IDX in its press release on Thursday (March 30, 2023).
In addition to the ARB adjustment, the IDX will also normalize regular exchange trading hours.
Currently, trading hours are from 08:45 WIB to 15:15 WIB. However, starting April 3, 2023, trading hours will be extended to 16:15 WIB.