Redam Market Pressure, IDX Says Buyback Doesn't Always Raise Prices, But Remains Strategic

JAKARTA The Indonesia Stock Exchange (IDX) explained that buyback is one of the legitimate and strategic mechanisms for issuers to maintain stock price stability, especially when the market is under pressure that does not reflect the company's fundamental conditions accurately.

IDX Trading and Member Regulation Director Irvan Susandy said that the effectiveness of buybacks in reversing stock prices relies heavily on a number of factors, such as buyback scale, issuer fundamental power, and overall market sentiment.

"In some cases, the buyback program is able to strengthen investor perceptions that management has confidence in the company's long-term prospects, thus helping to hold back deeper downs or even recover prices," he said in a statement, Monday, July 21.

He added that his party considered that the buyback had contributed to the stabilization of the share price of a number of issuers.

Nevertheless, he said that this step was not always able to reverse the downward trend triggered by global external pressure.

On the other hand, Irvan said that this step continues to strengthen market perceptions of the issuer's commitment to maintaining the value of the company and taking into account the interests of shareholders.