Indonesia Stock Market
For the second consecutive year, young adults in the range of 21 to 30, which are often referred to as the millennials, have dominated the group of investors in Indonesian equities and affected Indonesian stock market as deductions from the countries stock exchange market revealed. The term “millennials” coined by two demographers, William Strauss and Neil Howe. The term, which is widely used by researchers and demographers, simply means people given birth to in the early 1980s, 1990s and the year 2000s.
Indonesia, a country in Southeast Asia and the world’s largest island country, has a population of about 270 million making it the fourth most populous country in the world. Millennials occupy more than half of Indonesia’s population. Indonesia also has an adult literacy level of 95 percent, according to UNESCO, and is expected to increase in the coming years. Although the characteristics of a millennial may vary by region, society or economy, millennial in Indonesia are known for increased familiarity with political affairs, media, communications and technological gadgets.
Millennials Rule as Foreigner Flee
Foreigners withdrew a record total of $2.1 billion from the Indonesian equities in last quarter, according to Bloomberg. Ahead of the April 2019 presidential elections, companies have become wary of possible policy shifts. Indonesia possesses a lot of natural resources and is expected to attract investments but investors and foreign companies cited the length of time in setting up operations and acquisition of business permits or licenses. To buttress foreign investments, the government is planning to give tax holidays for businesses that make large investments.
According to the Central Securities Depository, a department under the Indonesian Stock Exchange, campaigns done the preceding year in lieu of contests and pop concerts on the trading floor of the stock market has helped increase the number of retail investors by 40 percent, with participators summing more than 1.5 million since November of the previous year, 2017. A significant increase in millennials, particularly those in their 20s, occupied more than 35 percent of all retail investors in October quite far from the 27 percent in November of the previous year. The 31 to 40 year-olds group, which is the next largest group, occupied a quarter of retail investors. The over 40 year-olds group accounted for about 23 percent.
Investors in Indonesia Stock Exchange
Despite all this developments, Indonesia ranks among the lowest in terms of number of individual investors among other Asian countries. Individual investors in Indonesia represent about 42 percent of the annual revenue on their exchange in the previous year, which is less in comparison to over the 80 percent in Taiwan and about 59 percent in Thailand.
Few percentage of the 270 million people of Indonesia are registered stock investors. According to recent statistics, foreign investors will likely place a record net outflow, in what is seen as a positive news. The record may reach about $3.3 billion this year after the withdrawal of about $3 billion the previous year. The Jakarta Composite Index has a experienced a six percent decline. The decline will likely signal its first annual decline in the last three years.