IDX Calls The P2SK Law Provides A Conducive Climate For The Capital Market

Illustration of the Indonesia Stock Exchange (Photo: Doc. Antara)

JAKARTA - The Indonesia Stock Exchange (IDX) stated that the presence of the Financial Sector Development and Strengthening Law (UU P2SK) could increase the flow of incoming capital (capital inflow) for the Indonesian capital market.

Director of Transaction and Compliance Supervision of the Indonesia Stock Exchange (IDX) Kristian Sihar Manullang said the hope for the P2SK Law would certainly provide a conducive climate for the capital market.

"Of course, it can provide increased inflows instead of outflows," he said, quoting Antara, Tuesday, May 16.

However, it does not deny that Indonesia's capital market in the future cannot be separated from negative sentiments that come from the global level.

He gave an example, such negative sentiments, such as the high benchmark interest rate at the global level or the increase in the rupiah exchange rate against the United States (US) dollar, which could have a negative impact on the Indonesian capital market.

There are certain sentiments. One day, for example, there is an increase in interest rates, an increase in the US dollar, will provide negative sentiment for local markets," Kristian said.

As of May 12, 2023, his party reported that during this year foreign investors had recorded net buys of IDR 16.11 trillion, of which during 2022 foreign investors recorded net buys of IDR 60.58 trillion.

Then, until April 28, 2023, the total number of Indonesian capital market investors was recorded at 10.88 million investors, or an increase of 6 percent year to date (ytd), compared to 10.31 million investors by the end of 2022.

Minister of Finance Sri Mulyani Indrawati explained that the P2SK Law regulates five crucial things for financial sector reform, including, first, strengthening the institutions of the financial sector authority while still paying attention to the independence, and second, strengthening governance and increasing public trust.

Then, third, encourage the accumulation of long-term financial sector funds for sustainable development financing and support, fourth, consumer protection, and fifth, literacy, inclusion and innovation in the financial sector.

"Reformation in the Indonesian financial sector is the main prerequisite for building an Indonesian economy that is dynamic, sturdy, independent, sustainable, and just," said Sri Mulyani.