Saham (stock) is one of the most popular financial instruments in the market


 

Saham (stock) is one of the most popular financial instruments in the market. Issuing stocks is one of the options for companies when deciding on corporate funding. On the other hand, stocks are an investment instrument favored by many investors because they can provide attractive returns.


Stocks can be defined as evidence of ownership in a company or limited liability company. By investing capital, the investor has claims to the company's income, claims to the company's assets, and the right to attend the Annual General Meeting of Shareholders (AGM).


Advantages of Stocks:


Dividends: Dividends are distributions of profits given by the company and originate from the profits generated by the company. Dividends are distributed after approval from the shareholders at the AGM. If an investor wants to receive dividends, they must hold the shares for a relatively long period until they are recognized as shareholders entitled to receive dividends.


Capital Gain: Capital gain is the difference between the purchase price and the selling price. Capital gain is formed through stock trading activities in the secondary market. For example, if an investor buys ABC shares at Rp 3,000 per share and then sells them at Rp 3,500 per share, the investor earns a capital gain of Rp 500 for each share sold.


Risks of Stocks:


Capital Loss: Capital loss is the opposite of capital gain, where an investor sells stocks at a lower price than the purchase price. For example, if PT XYZ shares are bought at Rp 2,000 per share and then the share price continues to decrease until it reaches Rp 1,400 per share. Fearing that the share price will continue to decline, the investor sells at the price of Rp 1,400 per share, incurring a loss of Rp 600 per share.


Liquidation Risk: If a company goes bankrupt or is dissolved by the court, shareholders' claim rights are prioritized last after all company obligations are settled (from the sale of company assets). If there is still a surplus from the sale of company assets, then the surplus is distributed proportionally to all shareholders. However, if there is no surplus from the company's assets, then shareholders will not receive any proceeds from the liquidation. This condition represents the heaviest risk for shareholders. Therefore, shareholders are required to continuously monitor the company's developments.


In the secondary market or in daily stock trading activities, stock prices fluctuate, either in the form of increases or decreases. Stock prices are formed due to supply and demand for the stocks. Supply and demand occur due to various factors, both specific to the stock (company performance and industry) and macroeconomic factors such as interest rates, inflation, exchange rates, and non-economic factors such as social and political conditions.


Sector and Subsector Classification:

Starting from January 25, 2021, the IDX implemented a new classification for sectors and industries of listed companies called the "Indonesia Stock Exchange Industrial Classification" or IDX-IC. For more information, you can access the IDXIC announcement and guide documents on this page (click Market Data-Stock Indices).

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