IEV And IEP Implementation Is Considered To Submerge The Establishment Of Unnatural Stock Prices

Illustration. (Photo: Doc. Antara)

The Indicative Equilibrium Price (IEP) and Indicative Equilibrium Volume (IEV) features in the Exchange trading system which have been launched since December 6, 2021 by the Indonesia Stock Exchange (IDX) are considered to increase transparency and reduce the formation of unreasonable stock prices.

Frisca Devi Choirina, Founder of @ngertisaham, said that the IDX's move was a positive progress in increasing transparency and efficiency in stock trading. Frisca stressed that this step will also help reduce the uncertainty of stock prices that investors often experience, especially those who have just plunged into the world of capital market.

"Actually, these two things (IEP and IEV) have been implemented from far away during pre-opening and pre-closing. I see the goal is to reduce the formation of unreasonable prices," Frisca told reporters, Thursday, March 28.

In addition to having the benefits of obtaining stocks at a more reasonable price, Frisca also said that through the IEP and IEV mechanisms the behavior of herding behavior and Fear of Missing Out (FOMO) or participating in buying shares can be minimized, especially for novice retail investors.

"This mechanism is actually the same principle as in traditional markets in general, investors can see market prices and can bid until they finally meet a matchable price. So this IEP and IEV will attract stock prices to their equilibrium. When the equilibrium price has been established, it's up to the investor whether he wants to buy it or not," said Frisca.

In addition, Frisca responded to the roles of IEV and IEP in the Full Call Auction (FCA) Special Monitoring Board. According to him, the system currently enforced in the FCA five times a day can positively reduce or minimize the formation of unreasonable prices.

Then, Frisca hopes that the Exchange trading system in the future can be improved so that it can further protect retail investors, especially novice investors. Thus, he also hopes that Indonesia's capital market in the future will be more inclusive.

"And hopefully other good rules in the stock exchanges of developed countries can also be implemented on the IDX in stages," he concluded.