Indonesia will lift pandemic-era trade limits at the end of March, according to the authority.
(Reuters) – JAKARTA – In a letter to investors, Indonesia’s financial services body announced that it will relax some pandemic-era stock market regulations, such as trading hours and short-selling.
To safeguard the market from instability, the OJK agency implemented interim regulations at the commencement of the COVID-19 pandemic in 2020.
OJK’s director of capital markets oversight, Inarno Djajadi, stated in a letter acquired by Reuters on Friday that the regulator will not prolong the rules beyond the end of this month because the government lifted all coronavirus-related movement limitations late last year.
The letter was authenticated by a regulator employee, who refused to speak further.
According to the memo, short-selling will be allowed to resume in April for a list of companies where it had previously been prohibited. The present 5% decline in the main index will be increased to a 10% reduction before trading is stopped.
The regulator will also reinstate pre-pandemic auto-rejection regulations, which restrict how much share values can rise or fall in a single day, in phases.
Because of the high volatility during the pandemic, the exchange reduced the bottom limit to refuse deals when share values fell by 7%, while the upper limit remained unaltered.
This will return to normal in April, with the lowest auto-reject barrier increasing from 20% to 35% based on share price levels.
The message also stated that trading hours would be changed to correspond with the central bank’s settlement times.
It was unclear whether this meant that the market closure would return to 4 p.m. Jakarta time (0900 GMT), as it had before the epidemic. The bazaar currently ends at 3 p.m.