When you look at the economic news section of television You will definitely find news about JCI or Composite Stock Index. JCI is a type of index product issued by the Indonesian Stock Exchange (IDX).
In addition to JCI, there are other index products. Many more are now available in IDX, from sector by sector to some variables. The goal is for investors and traders to choose the best tools. What is a stock index? Check out the following checks.
Understanding stock indices
A stock index is an index that measures the performance of a certain group of stocks or all stocks in the capital market.
Currently, the Indonesian Stock Exchange offers a wide range of indices which are categorized by content. one of which is JCI
Stock indices are important because they can be used as a benchmark for the overall and sector development of the Indonesian stock market. Therefore, you can use this index price development as an assessment medium to choose the best version for yourself.
stock index function
1. Measuring the movement of the Indonesian capital market
The first function of this product, especially JCI, is to measure the movements of the Indonesian capital market. For some sector indices, such as the IDX Trans, they measure the price movements of these securities in their respective sectors.
As branch information A branch index can be used as a benchmark for the stocks you want to buy. You will know if the stock is good or not.
3. It is a benchmark for device integration.
The third function is to serve as a benchmark for investment tools with integration concepts such as: mutual fund And ETFs As we all know, there are mutual funds and ETFs with index values.
4. Consider choosing the best stocks
It is believed that the existence of this product will allow investors and traders to choose the best investment products in their own way, for example comparing price movements with JCI, selecting stocks that enter LQ45, etc.
5. It is a benchmark for calculating potential profits.
Another benefit of this product is that it serves as a benchmark for calculating the potential profit of a stock and the overall development of the capital market.
stock index type
1. Stock Index by Branch
is an index by sector This product calculates the average price movement of a company’s stock in a particular sector. For example, IDX Trans calculates the moving average price movement of equity securities issued by transport investors.
2. Composite Stock Index
As the name implies, JCI is a type of index that indirectly calculates the movement of the average price of all stocks listed on the Indonesian stock exchange. The rise and fall of JCI represents the development of the Indonesian capital market itself.
3. Featured stock indexes
The third category is the top stock index. Indonesia stock index Divided by market capitalization
These top stocks are stocks of some companies with high market capitalization and good liquidity. An example of this type is LQ45IDX30 and others
4. Second-liner stock index
Second liner stock It is a securities with low to medium market capitalization. Examples of this type are the IDX SMC Composite and Pefindo25. You can use this product to determine the best alternative investment product.
5. Shariah Stock Index
as the name suggests This index is used to calculate the average price movement of instruments included in the Shariah Securities List (DES). Examples include the Islamic Stock Index (ISSI), the Jakarta Islamic Index (JII) and the Jakarta Islamic Index 70 (JII70). Out in this category you can choose. halal investment.
In this category, the index is further divided into two sections according to the listing board: the main board index and the development board index.
The seventh category is an index that measures the performance of companies that contribute to sustainable and responsible investments. An example is SRI KEHATI, an index compiled and published by IDX in collaboration with the Indonesian Biodiversity Foundation. (KEHATI FOUNDATION)
IDX also publishes an index that includes all companies that have paid high dividends for the past 3 years. The product is named IDX High Dividend 20.
There is an index that takes into account securities from state enterprises (BUMN), regional enterprises (BUMD) and its affiliates in particular.
PEFINDO i-Grade is an index that measures the performance of stocks of high investment grade companies according to PT Pemeringkat Efek Indonesia (PEFINDO).
How to calculate stock index prices
There are currently four methods for calculating the index price::
- Market capitalization adjusted to market capitalization Free weighted average
- Dividend payout on adjusted balance Free float market capitalization weighting
- Market capitalization that is capped Free Floating Market Cap + Quality Factor
- Free-capped floating-adjusted market capitalization + ESG skew factor.
But nowadays most indices are calculated using the first method. However, you do not need to calculate the value of this product manually. with the help of technology You can view the price movements of these products directly from Google.
Likewise, you can also access changes in index values or elements in the results of major and minor assessments for certain months. Fund Information Sheet of those changes You can view both documents at IDX.co.id.
Tips for using stock indices
There are several tips to take advantage of the products produced by the Indonesian stock exchange and your best stock selection partner. Here are some tips:
- Estimating the best timeframes for investing and trading stocks based on occasional JCI movements.
- Select stocks according to the sectoral index development, BEI will update. Fund Information Sheet and periodically assess the movements of companies involved in this field. In the document, you can see which stocks are leading among them.
- Branch indexes can also be used as a benchmark for the stocks you choose. So you know how the performance of the issuing company compares to the performance of other companies operating in the same field or in the same category.
The stock index is one of several projects from the Indonesian Stock Exchange (IDX or IDX), which aims to make it easier for investors and traders to choose the best products. Make the most of this BEI product for a more profitable investment.
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