Jakarta. The Indonesia Stock Exchange (IDX) has added 37 stocks to its watch list for companies with potentially high shareholding concentration after introducing a new screening method designed to identify shares whose prices move sharply despite relatively light trading activity.

The revision increases the total number of stocks classified under the High Shareholding Concentration (HSC) category to 51, following the first review under the updated methodology.

IDX President Director Jeffrey Hendrik said the exchange has incorporated a new price-impact ratio into its screening process as part of broader efforts to strengthen market surveillance and improve market integrity.

“We have revised the HSC methodology by introducing the price-impact ratio as an additional screening criterion for all stocks with a market capitalization above Rp 10 trillion ($554.6 million),” Jeffrey told a press conference on Tuesday.

The new indicator is designed to identify stocks that experience unusually large price movements without corresponding trading activity -- behavior that may indicate a concentrated shareholder base or warrant closer regulatory scrutiny.

The price-impact ratio compares a stock's price movement with its trading velocity, which is calculated using average trading volume relative to the company's publicly tradable shares, or free float.

As a result, stocks that post significant price gains despite relatively low trading volumes will generate a high price-impact ratio and become candidates for further review to determine whether they exhibit signs of concentrated ownership.

“A high price-impact ratio does not automatically mean a stock has high shareholding concentration. It simply becomes the starting point for additional screening,” Jeffrey said.

The exchange will apply the revised methodology every three months, in line with its regular review cycle for major stock indices.

Jeffrey said the changes form part of the IDX's ongoing capital market reform agenda, which is being implemented together with Indonesia's self-regulatory organizations to strengthen trading surveillance and improve market quality.

“We will continue reviewing the reforms that have been introduced while consulting market participants on additional measures to further strengthen Indonesia's capital market,” he said.

According to Jeffrey, the enhanced screening framework is intended to promote a more orderly, fair, and efficient securities market while reinforcing investor confidence in Indonesia's stock exchange.

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