Here Comes Generation Z in Indonesia’s Stock Market

29-Dec-2016 Intellasia | Jakartaglobe | 6:00 AM Print This Post

A shopping mall in South Jakarta each weekend is full of young people flocking to hangout at franchise coffee shops or bargain hunting at its downstairs bazaar.

In one corner, a group of young volunteers tirelessly handed out the brochure offering free classes to passersby. Their targets: fellow youngsters who, like them, may consider foregoing a pair of white Adidas Superstar or Jansport backpack in order to reserve a seat in retailer Mitra Adiperkasa’s next general shareholder meeting.

These young men and women are students or graduates who have joined the “Investor Saham Pemula,” or “Beginner Stock Investor,” community online to cash in on one of the fastest growing investor groups at the Indonesia Stock Exchange.

According to Indonesia’s Central Securities Depository (KSEI) data, Single Investor Identification (SID) of young investors aged 17-25 increased 60 percent to 32,930 individuals as of November this year from 20,626 individuals 12 months ago. That triple the pace of the total investors numbers, which only grew 20 percent to 305,972 individuals over the period.

IDX has put much effort into attracting new investors by allowing them to open investment account with as little as Rp 100,000 ($7.40) in deposits. The bourse also reduced lot size – the number of shares one must purchase in one transaction – to 100 shares from 500 shares per lot. That helps retail investors with shallow pockets to start trading at the bourse.

“I started to invest Rp 100,000 into the capital market. Before that I only knew that new investor need to open an account for at least Rp 1 million,” Wahyu Rizki Nanda, a 20-year old accounting student at Bina Nusantara University, said.

Wahyu said he started investing last year using pocket money.

Wahyu’s peer Indah Nurhabibah, a 21-year old college student at Universitas Negeri Islam, said that she first started to invest in stock market last year, borrowing Rp 300,000 from her parents out of curiosity after seeing the IDX advertisement in newspaper.

“My friends persuade me… it seems interesting to start investing,” Indah said.

Things were not as rosy just several years ago. When 25-year old bachelor graduate Tias Nugraha Putra started the Investor Saham Pemula community in 2013, the stock market was too expensive and obscure to students like him.

Adding to his frustration it was impossible to find the low-fare stock market courses and stock investors community during his college year at Diponegoro University in Semarang, Central Java.

“All of the courses that I found mostly cost above a million rupiah,” said Tias. In comparison, Diponegoro University charged the same amount for some of its students for a semester of study there in the 2013/2014 academic year.

Tias said the community started first through WhatsApp and Line groups, inviting high school and college students interested in the stock exchange to ask questions.

Aside from managing the online group and holding free courses in co-working spaces, members also conduct roadshows at universities and high schools.

Tias, who draws inspiration from investment giants like Warren Buffett, also believe that the best friend to the investors are knowledge and time, the later of which is aplenty for the young. Buffet after all bought his first stocks as an 11-years old.

“[To] be successful and rich, we need to start investing in stock,” he said, adding that he prefers to invest in small cap stocks with good fundamentals.

Now, his community has a presence across Indonesia, although mostly centered around Java, with at least 360 active members and representatives in 26 cities and support from various brokerage firms and the IDX, which provides support with a free lecturer or venues for events.

IDX development director Nicky Hogan said that over these past years, the bourse has been encouraging more young investors to invest in stock market and by next year they will keep implementing the already successful programme in attracting more prospective young investor.

That includes more of the IDX investment galleries at universities, holding workshops and events across Indonesia. As of December this year, IDX opened 240 investment galleries across Indonesia.

“We do not have a specific target [for young investors], but overall we are targeting at least 100,000 new investors join the stock market next year,” Nicky said.

Mandiri Sekuritas senior vice president Lisana Irianiwati said that the company also sees young investors as its potential market.

The brokerage-arm of state-owned Bank Mandiri actively promotes educational programmes in partnership with the IDX, while also creating a simple, user friendly digital channel to attract more of these kind of investors to invest in capital market.

“We are actively introducing the digital channel in which they can access the online trading through mobile phones and application,” added Lisana.


Category: Indonesia

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