Gotrade News - The Indonesia Stock Exchange (BEI) has officially launched its Liquidity Provider (LP) program for equities on Monday (04/20). Phintraco Sekuritas became the first securities firm to provide buy-sell quotations under the new initiative.
Five stocks were selected as initial participants in the landmark LP program for Indonesia's capital market. The stocks are GGRM, TKIM, TPMA, TUGU, and WINS, spanning multiple industry sectors.
Key Takeaways:
- BEI officially launches the Liquidity Provider program with Phintraco Sekuritas as the first quotation provider for 5 selected stocks
- The program aims to narrow bid-ask spreads and deepen market liquidity for both domestic and global investors
- Implementation remains in a voluntary pilot phase with periodic evaluation before broader expansion
The program is designed to narrow bid-ask spreads on selected stocks. With tighter spreads, investors are expected to transact more cost-efficiently in these securities.
LP Program Mechanism and Objectives
A Liquidity Provider is a participant that actively posts continuous buy and sell orders for designated stocks. This mechanism is widely used across major global exchanges to maintain market depth and trading efficiency.
According to Katadata, Irvan Susandy, BEI's Director of Trading and Member Regulation, expressed confidence in the initiative. He stated that this step is expected to enhance liquidity, particularly for stocks with potential for more optimal growth.
The five selected stocks represent diverse sectors ranging from tobacco to shipping. GGRM represents the consumer sector, TKIM covers pulp and paper, while TPMA and WINS are from the maritime sector.
TUGU, a Pertamina subsidiary in the insurance sector, is also included in the program. The cross-sector selection demonstrates that the initiative is not limited to any specific industry.
The LP program is currently voluntary and operates on a limited trial basis. BEI will evaluate its effectiveness before expanding coverage to additional stocks and securities firms.
Impact on Indonesia's Market Structure
The LP implementation is part of BEI's broader effort to strengthen Indonesia's capital market infrastructure. According to Kabar Bursa, the program is expected to attract investor interest from both regional and global markets.
Improved liquidity is one of the primary factors considered by institutional investors when evaluating emerging market equities. Stocks with tight spreads and consistent volume tend to be preferred by professional fund managers globally.
In the United States stock market, the market-maker mechanism has been standard practice for decades. Investors looking to understand global market dynamics can study the performance of indices like the S&P 500 (SPY) as a reference point.
BEI plans to offer incentives for securities firms willing to serve as Liquidity Providers. This aims to encourage broader participation from market participants across Indonesia's brokerage industry.
For comparison, the consumer goods sector including tobacco has major global players such as Philip Morris (PM) in the US market. GGRM's inclusion in the LP program signals BEI's attention to liquidity for domestic blue-chip stocks that mirror global industry categories.
BEI's move marks a positive signal for Indonesia's capital market development going forward. Periodic evaluation and potential program expansion will be key to the long-term success of this market structure initiative.
Sources:
Kumparan, BEI Mulai Program Penyedia Likuiditas Saham, 5 Perusahaan Ini yang Perdana, 2026.
Katadata, BEI Mulai Terapkan Kuotasi Liquidity Provider, Ada Saham TUGU GGRM hingga TKIM, 2026.
