OJK: Moving the Capital May Improve Investor Spread



Mahinda Arkyasa

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  • TEMPO.CO, Jakarta - The Financial Services Authority ("OJK") said that the plan to move the capital city to Kalimantan will encourage equal distribution of investors. Currently, most of major investors are located in Java.

    "Hopefully, if the government move the capital to Kalimantan, this means there will be a new economic growth hub and the spreading of new wealthy people, this can [cause] equal distribution of investor," said Chief Executive of Capital Market Supervision of OJK Hoesen on Friday, October 25, 2019.

    Indonesian Central Stock Custodian data on October 23, 2019 revealed that the number of investors based on territory is still dominated by Java with a ratio of 72.20 percent. Followed by Sumatera with a ratio of 15.01 percent and Kalimantan with 4.90 percent. The remaining investors are spread on the eastern region of the country.

    For the total ratio of 72.2 percent, Java is in control of IDR 2,385 trillion of assets, or equals to 95.55 percent of the total national assets. Meanwhile, Sumatera controls IDR 32.89 trillion while the rests are spread in Kalimantan, Sulawesi, Bali, and eastern Indonesia.

    Hoesen asserted that such condition showed that currently there is no equal distribution of assets and wealth. Therefore, OJK continues to encourage the establishment of stock companies in regions to increase the number of investors.

    Hoesen also hoped that development of new economic hubs in many regions through infrastructure development in the past five years can help to drive equal distribution. The development is expected to create new economic hubs, which will lead to potentially invites new investors.

    "I hoped that until 2022, the 72 percent composition in Java can decrease to 60 to 65 percent, and the remaining are outside of Java," Hoesen said.

    In reference to OJK data, as of October 11, 2019, the total number of stocks investors had reached 1.04 million. Meanwhile, the number of hedge fund investors had reached 1.53 million and investors of State Bonds had reached 291,931 investors.

    According to OJK's records, the number of stocks investors had increased by 194 percent since 2014, while the number of hedge fund investors had increased by 345 percent since 2014.