World’s most volatile big stock is rocking Indonesia’s market

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Sverige Nyheter Nyheter

Barito’s wild swings have perplexed professional analysts.

Its share-price chart resembles that of an emerging-market penny stock: a 1 200% surge punctuated by two crashes of more than 40% — all in the span of less than nine months.

The trading restrictions “intended for investor protection ironically undermined broader investor confidence,” said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital Pte. “In the near term, this situation will likely deter risk-averse investors, especially if perceived as indicative of broader market instability or regulatory challenges.”

At first, the restrictions were met with little fanfare. That is until the Indonesia Stock Exchange placed Barito Renewables on the list in late May, without offering any specific reasoning beyond citing the “significant increase” in the share price. The exchange has defended the restrictions, arguing that it has increased price discovery for several penny stocks and increased liquidity. Financial Services Authority Capital Market Supervisor Inarno Djajadi said the regulator is benchmarking its policies with similar rules in other countries.

Investors worry that entering the watchlist can create a knee-jerk reaction among traders. Four companies under MNC Group were placed onto the watchlist at the end of May, including PT MNC Asia Holding. That stock tumbled 60% in the two weeks after the placement. Shares of restaurant manager PT Sari Kreasi Boga plummeted nearly 70% within 3 weeks of inclusion in the same month.

 

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