The Indonesia Stock Exchange, known as the IDX, is the country's only organised stock market. It is based in Jakarta and lists companies in banking, consumer goods, mining, energy, property and telecommunications. The main index is the Jakarta Composite Index (IHSG), and the Financial Services Authority (OJK) regulates the market. The central securities depository is KSEI, which holds investors' shares in electronic form.
This guide explains how an investor buys shares on the IDX, step by step, including the board-lot rule that catches many newcomers. It is general information, not advice on which shares to buy. Rules and procedures change, so confirm the current position with a licensed securities company before you act.
Step 1: choose a licensed securities company
Trading on the IDX is done through securities companies, which are licensed brokers and members of the exchange. You open an account with one of them, and it places the orders for you. Check that the firm is licensed by the OJK and is an exchange member, and ask how it keeps client money and what protection applies if it fails.
Compare the full cost of trading. Brokerage fees are only part of it. Exchange fees, clearing charges, and taxes on share sales add to every trade, and some firms have minimum fees that matter on small orders.
Step 2: open the accounts
Shares on the IDX are held through KSEI in electronic form. To buy, you normally need a securities account with your securities company, which is linked to your investor account at KSEI, and a bank account for payments. The securities company arranges most of this during the account opening, and the identity checks follow the rules of the OJK and the depository.
Opening an account takes identity documents, a tax identifier and a record of your bank. Foreign investors face additional checks, so ask the firm what documents it needs and how long opening takes before you plan to invest.
Step 3: understand board lots
This is the rule most newcomers miss. The IDX trades shares in board lots, and the standard board lot is 100 shares. An order must be for a whole number of lots, so you cannot buy 150 shares of a company that trades in board lots of 100. The price per lot is the share price multiplied by 100, which can be a larger amount than a new investor expects.
Before you place an order, check the price of one lot. A share at 5,000 rupiah costs 500,000 rupiah for one board lot, before charges. Plan the amount you invest around whole lots, and check the minimum order size on your platform.
Step 4: place an order and manage price limits
Orders can be market orders, which fill at the best available price, or limit orders, which set the highest price you will pay or the lowest you will accept. A limit order is safer for shares that trade thinly, because a market order can fill well away from the last price.
The exchange sets limits on how far a share's price can move in one session, and trading in a share can be halted when it reaches those limits. Check the current limits for any share before a trade, because a limit can stop you selling on the day you need to.
Step 5: settlement and cash
After a trade, the shares and the cash change hands on the exchange's settlement cycle. Ask your securities company for the schedule, and make sure you have the cash in your account in time. Keep the contract notes and the statements, for your records and for tax.
Step 6: understand the currency
IDX shares are priced in rupiah. If you hold or earn money in another currency, you must convert to buy and convert back to sell. The rupiah has moved against major currencies over time, and a foreign holder's return depends on the exchange rate as well as the share price.
Check how the money would come back out. Conversion and transfers depend on the rules of the central bank and on the banks involved, and fees and timing vary. The guide on currency risk for foreign stocks explains how to weigh this.
Step 7: read the company
Before buying, read the latest annual report and the interim results. Look at profit over several years, the level of debt and the source of earnings. Some Indonesian companies are controlled by a single family or group, so check the shareholding structure and whether minority holders are treated fairly in dividends and decisions. Dividend history is a useful test of how a company treats its shareholders.
Inflation and interest rates have varied over time, so compare results across several years and consider what inflation does to nominal profit.
Worked example: buying one board lot
Suppose a share trades at 2,000 rupiah. One board lot is 100 shares, which costs 200,000 rupiah before charges. Assume the securities company's fee and the exchange, clearing and tax charges together come to about 0.3 percent of the value, which is about 600 rupiah on the purchase.
If the price rises to 2,300, the lot is worth 230,000, a gain of 30,000 before the charges on the sale. If it falls to 1,700, the lot is worth 170,000, a loss of 30,000 plus costs. The whole lot must be bought or sold together, so the size of the position is set in steps of 100 shares. If you wanted exposure of 150 shares, you would have to choose between one lot and two lots, which may not match your plan.
Common mistakes
Ignoring the board lot. An order that is not in whole lots is rejected, and a lot can cost far more than planned.
Buying a thin share with a market order. The fill can be far from the price you saw.
Forgetting the price limit. A limit can stop you selling on the day you need to.
Overlooking control structures. A company controlled by one group can make decisions that minority holders cannot influence.
Ignoring the currency. A rise in the share price can be cancelled by a weaker rupiah.
Checklist before you invest
- Confirm the securities company is licensed by the OJK and is an exchange member.
- Open the securities and KSEI accounts, and check the documents needed.
- Work out the price of one board lot, and the total cost with all charges.
- Check the share's price limit, its volume and its settlement schedule.
- Read the company's results, the shareholding structure and its dividend history.
- Plan the currency: the conversion rate, the fees and how money would come back out.
Key takeaways
To buy shares on the IDX you need a licensed securities company, a KSEI investor account and a bank account for payments. The standard board lot is 100 shares, so the smallest order is a whole lot, and its price can be larger than expected. Shares are priced in rupiah, and a foreign investor carries currency risk on top of the share's own risk. Check the lot size, the total cost, the company's structure and results, and the plan for bringing money back out before you invest.
This guide is for general information, not financial advice. See the disclaimer.