ENGLISH FOR

STOCK EXCHANGE
SUMMARY OF 4 MEETINGS
BOY SATYA GRAHA SARAGIH
1904421053
INDEX

Index is a statistical
measurement of changes in
the value of an economy or
market .
 EFEK INDEX FUNCTION

➢ The function of the Securities Index is as a benchmark (benchmark)

➢ Product portfolio performance: ETFs, Index funds, Derivatives

➢ Sector performance : SMinfra18, Infobank15

➢ Economic performance: JCI

This Phot o by U nknow n aut hor is licensed under CC BY.

METHODOLOGY INDEX

Determination
Effect selection Weighting and
of the Backtesting
criteria adjustment
universe/theme

Return Base date and Index

calculation base value maintenance
UNIVERSE/THEME SETTING

 The theme is the coverage of the capital market segment measured by the
index, for example:
 Liquid stocks
 Specific market capitalization stocks
 Sharia shares
 Stocks with social/environmental insight
 Corporate governance
 Specific sectors
 Dividend paying shares
 Stocks from developing countries/certain regions
EFFECT SELECTION CRITERIA

• Objective = Selection based on criteria

• Subjective = Selection based on index committee assessment
• Qualitative = Implementation of GCG
• Quantitative = Market capitalization
• Fundamentals = Company profit growth, market capitalization
• Technical = Transaction liquidity
• Absolute = Market capitalization >Rp10 trillion
• Relative = 10 stocks with the highest market capitalization (rank)
WEIGHTING
AND ADJUSTMENT

❖ Free float = Weight adjustment based on the

number of free float securities in the market
❖ Weight cap = Maximum weight of effect in
index
❖ Fundamental adjustment = Weight adjustment
based on the issuer's fundamental condition
❖ Dividend adjustment = Weight adjustment
based on historical dividend payments
❖ Sector equal weight = Adjustment of equal
weighted index, where equal weight is assigned
at sector level

This Phot o by U nknow n aut hor is licensed under CC BY-ND.

BASE DATE AND BASIC VALUES
RETURN IS THE DIFFERENCE BETWEEN THE SELLING PRICE AND
THE PURCHASE PRICE (IN
PERCENTAGE) PLUS OTHER CASH (EG DIVIDENDS). ANOTHER
DEFINITION DESCRIBES RETURN
IS THE PROFIT OBTAINED BY COMPANIES, INDIVIDUALS,
AND INSTITUTIONS FROM THE RESULTS
HIS INVESTMENT POLICY (FAHMI, 2012: 189)
This Phot o by U nknow n aut hor is licensed under CC BY-SA-NC.
RETURN CALCULATION

Price Return
Price changes
Total Return
Price changes
Dividend income
Tax (if net total return)
BACKTESTING

To provide an
overview of
the historical
The purpose
movement of
of backtesting:
the newly
launched
index.
MAINTANANCE INDEX

❑ Changes in constituent effects and their weights.

❑ Conducted annually, 6 months, or 3 months.

❑ There is a lag between the announcement and the implementation of the review to give
market participants an opportunity to adjust their portfolio.
RISK

 Risk can be interpreted as a form of uncertainty about a

 circumstances that will occur later (future) with the decisions taken
 based on various considerations at this time (Fahmi: 2012)
RETURN

 Return is the difference between the selling price and the purchase price (in
 percentage) plus other cash (eg dividends). Another definition describes return
 is the profit obtained by companies, individuals, and institutions from the results
 his investment policy (Fahmi, 2012: 189)