Jakarta. Indonesia Stock Exchange (IDX) is moving closer to scrapping the Rp 50 minimum share price, but analysts warn that allowing stocks to fall as low as Rp 1 may unleash a wave of selling rather than create fresh buying interest.

The IDX is refining its plan to lower the minimum share price from Rp 50 to Rp 1 after conducting simulations between Aug. 22 and Aug. 29.

The exchange said the initial tests were generally successful, although further refinements are needed while ensuring all exchange members are ready for implementation. If there are no major obstacles, the IDX plans to introduce the new minimum price in the first week of September.

Muhammad Wafi, head of research at KISI Sekuritas, said removing the Rp 50 floor would not automatically generate new demand for gocap stocks.

Instead, it would primarily remove the barrier preventing investors from selling shares they have been unable to exit. Many stocks stuck at Rp 50 have genuine fundamental problems, including companies undergoing debt restructuring or those with negative equity, he said.

“Once the Rp 50 floor is removed, the most likely scenario is a wave of selling from investors who have been trapped because they could not sell their shares. The risk of artificial liquidity is therefore very real, particularly among the majority of gocap stocks with weak fundamentals,” Wafi said on Monday.

Buying interest is therefore likely to remain limited because the companies' underlying fundamentals will not change simply because the minimum price is lowered.

While the policy could technically increase trading activity, Wafi said this should not necessarily be interpreted as healthier two-way liquidity. Instead, transactions could largely reflect a one-way price adjustment toward levels that better reflect companies' weak fundamentals.

Removing the artificial Rp 50 floor could nevertheless improve price discovery by allowing shares to reach more realistic valuations.

However, the move could also create new risks for less experienced retail investors who may be attracted by seemingly cheap share prices without recognizing that those prices often reflect weak fundamentals.

Wafi also warned of potential psychological pressures, including panic selling. He said eliminating the minimum price would not directly create new manipulation risks but could amplify vulnerabilities that already exist in low-priced shares.

“Historically, very low-priced stocks have been more vulnerable to pump-and-dump practices because the psychological appeal of a ‘cheap’ price can effectively attract retail investors. This is where regulators need to tighten supervision, particularly for stocks at low price levels,” Wafi said.

“Removing the floor should not automatically be assumed to be safe simply because the mechanism is legally permitted. Supervision must remain proactive rather than reactive.”

Senior analyst at Mirae Asset Sekuritas Nafan Aji Gusta shared a similar view, saying the removal of the gocap floor could improve price discovery by allowing shares that have been stuck at Rp 50 to move according to their fundamentals and the balance between supply and demand.

But any increase in liquidity may not last.

“Transaction volumes may initially surge, but if an issuer has weak fundamentals, limited free float, poor corporate governance, or inadequate disclosure, the stock could become illiquid again once the price adjustment process is complete,” Nafan said.

Allowing shares to fall as low as Rp 1 could also increase volatility and potential investor losses, he said.

Nafan therefore said the policy should be accompanied by stronger investor education and transaction monitoring, as well as proportional adjustments to tick sizes and auto-rejection limits.

FCA Under Review
As the IDX prepares to implement the new minimum price policy, analysts said the Full Call Auction (FCA) mechanism should remain in place but be further refined.

Nafan said the FCA should not be perceived merely as a “punishment board.”

The criteria for entering and exiting the FCA should be objective and transparent, with greater emphasis placed on an issuer's fundamentals, compliance, and corporate governance rather than simply its low share price.

The IDX should also strengthen transparency regarding indicative equilibrium prices, order volumes, matching schedules, restrictions on canceling orders ahead of matching, and the certainty of exit mechanisms from the FCA, he said.

“The removal of the Rp 50 stock price floor and improvements to the FCA should therefore move forward together to create healthier price discovery without reducing investor protection,” Nafan said.

The need for improvements does not mean the FCA should be abolished, according to Nafan. The mechanism remains an important risk-mitigation tool for shares facing liquidity problems, extreme volatility, weak fundamentals, inadequate disclosure, or governance issues.

With the Rp 50 floor removed, the potential for more extreme price movements could make the monitoring mechanism even more relevant.

Wafi agreed, saying the FCA would become increasingly important as an anti-manipulation mechanism after the minimum price is removed.

Eliminating the lower price floor could increase volatility risks, meaning the FCA should be retained and strengthened rather than abolished, he said.

“The two policies address different problems. Removing the floor addresses the issue at the price level, while the FCA addresses the price-discovery process,” Wafi said.

“Because they address different issues, the two policies should complement each other rather than replace one another.”

GOTO Could Enter a New Trading Phase
GoTo Gojek Tokopedia (IDX: GOTO), one of the stocks currently trading at the Rp 50 minimum price, could enter a new phase once the IDX removes the floor.

MNC Sekuritas analyst Christian said lowering the minimum price from Rp 50 to Rp 1 would create a new trading dynamic for GOTO.

The stock could fall below Rp 50 in the short term, but allowing the price to move freely could also remove the trading bottleneck that occurs when sell orders significantly outweigh buying interest at the minimum price.

“If the minimum price rule is changed, the expectation is that GOTO shares could fall below Rp 50. But there is also a positive side because sellers can meet buyers at a price where transactions can actually take place,” Christian said on Monday.

“This contrasts with the current situation at Rp 50, where sell orders outweigh buy orders and transactions often fail to match.”

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