How to Buy Stocks in Indonesia 2023

Summary

The stock market can feel like a maze for new investors, with twists, turns, and plenty of unknowns. Don’t let its jargon and flashing screens scare you away from potential gains. Investing for the future can turn a modest piggy bank into a robust portfolio.

To understand how to buy stocks from Indonesia, investors need to know that they can purchase individual Indonesian stocks directly through stockbrokers or online trading platforms, while they can also buy international stocks through these brokers.

US investors can also buy Indonesian shares traded on US markets, such as American Depository Receipts (ADR). Currently, the only Indonesian company traded on formal US exchanges is Telekomunikasi Indonesia (US-TLK) ADR, while other Indonesian ADRs traded on US OTC include Bank Rakyat Indonesia (BKRKF), Medco EnergiInternasional (MEYYY), and Bank Mandiri (PPERY).

Before seeking advice on the best stocks to buy, consider assessing your risk tolerance, investment objectives, investment plan, and how much capital you’re comfortable investing. By diversifying your portfolio and investing in various shares across diverse industries such as finance, technology, retail, and agriculture, you reduce your exposure to the volatility of individual stock prices.

Investing in share CFDs or real shares is up to your personal preference, but staying focused, continuously learning, and being prepared for anything is key to success.

This guide will delve into the intricacies of opening an account with a stockbroker, analyzing their fees and commission structures, and evaluating the trading platforms they provide. Plus, we’ll give our opinion on the top shares to buy today.

How to Buy Stocks from Indonesia in a few Steps?

Are you ready to explore the exciting world of stock market investing? Check out the broker’s table above and find the perfect match for your investment goals. Follow these simple steps to buy stocks and start investing.

1. Open a Share Dealing Account
2. Deposit Funds
3. Research and Pick your Stocks
4. Select the Order Type
5. Activate the Order and Buy your Stocks

What Markets can you Buy Stocks from in Indonesia?

Indonesian investors can purchase stocks from both domestic and global exchanges. Some of the major global exchanges that Indonesian investors can access through brokers, such as eToro and Capital.com, include: New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange (LSE), and Australian Stock Exchange, etc.

In these stock exchanges, customers can buy shares from different sectors, allowing them to better diversify their holdings. On top of that, Indonesian investors can access all the major European stock exchanges to buy real shares and share CFDs through these brokers.

Furthermore, traders from Indonesia can buy share CFDs in various markets, including finances and materials listed on the Indonesian stock exchange (IDX) on Capital.com.

What are the Normal Fees of Buying Stocks from Indonesia?

Investors looking to buy stocks from Indonesia should be mindful of the fees charged by brokers, which can impact profits significantly if not researched adequately. In addition to the purchase price, brokers may charge commissions, transaction fees, account maintenance fees, withdrawal fees, foreign exchange fees, inactivity fees, and even handling costs for shares. For the prevention of excessive charges from eating into profits, it’s advisable to choose a broker that offers fair fees and practical trading tools. For beginners, eToro is notably a good option, offering commission-free trading and having industry-standard pricing structures. When considering how to buy shares online, careful analysis of the fee structures of brokers operating in the Indonesian market is necessary to avoid unexpected costs.

Pros and Cons of Buying Stocks from Indonesia

Buying stocks from Indonesia comes with its pros and cons and here are some of them.

How to Choose the Broker I need to Buy Stocks from Indonesia?

Looking to buy shares from Indonesia? Here are the factors you need to consider before picking the right broker and getting started on your investment journey. Note that brokers play a crucial role as middlemen between traders and stock exchanges when it comes to buying and selling shares.

Regulation

Regulation plays a key role in guaranteeing that stockbrokers operate ethically and with integrity and that investors are protected from fraudulent activities. Additionally, regulation helps to prevent insider trading, market manipulation, and other illegal activities that can damage the reputation and stability of the stock market. Accordingly, choosing a regulated broker is a key step when assessing how to buy shares from Indonesia.

The Indonesian Stock Exchange (IDX) is regulated by the Indonesia Financial Services Authority (OtoritasJasaKeuangan or OJK), which oversees and regulates all financial services institutions in Indonesia, including the stock exchange. The OJK is responsible for ensuring that the IDX and its member companies comply with applicable laws and regulations and that investors are protected from fraudulent or unfair practices. The OJK also sets the rules and guidelines for the issuance of securities, trading on the exchange, and disclosure requirements for listed companies. Plus 500, for instance, is regulated by OJK in Indonesia.

Markets

Another thing to look at before considering how to buy shares in Indonesia is the variety of markets you can access. These markets cover different sectors such as healthcare, utilities, technology, services, consumer goods, financials, industrial sectors and conglomerates. Through the use of global exchanges and trading platforms, investors can seize opportunities across various markets worldwide. By doing so, they can diversify their portfolios and gain exposure to a range of industries.

To illustrate, individuals who have a keen interest in the industrial sectors can access stocks and stock CFDs of leading industrial moguls, whereas those who have a fondness for technology can opt for stock CFDs of tech behemoths such as Meta and Apple. With online brokers like eToro, Indonesian investors can access global markets and exchanges, enabling them to take positions in their favorite stocks and diversify their portfolios.

Platforms

When assessing where to buy shares from, it’s worth noting that investors have a range of trading platforms to choose from. Investors can benefit from trading through both mobile and desktop platforms provided by brokerage companies. Most platforms provide access to only Indonesian stock exchange-listed shares, while others allow access to exchanges globally. Furthermore, some stock trading platforms are geared towards casual investors, while others are better suited for experienced and active traders.

Notably, many brokers offer their custom-built platforms or popular third-party platforms such as MT4 or MT5, or both – your best bet is to choose a broker that offers both. Besides, to find the ideal trading platform for your investment style, look for tools and features that align with your individual needs.

Offering

When assessing how to buy shares in Indonesia, it’s important to know that online brokers offer a variety of options to suit different investing styles. You can choose to own real shares or opt for share contracts for difference (CFDs), which allow you to trade with borrowed funds and low collateral. Your choice between real shares and CFDs will depend on your preference and investment goals.

Real shares are better suited for long-term investment, while CFDs are ideal for short-term and day trading. While CFDs offer traders the flexibility to go long or short, taking advantage of price fluctuations, they are also leveraged products allowing increased exposure with a portion of the underlying stock’s price. Be sure to research and consider your options before selecting the right shares to buy. To help you get started, eToro offers both real shares and share CFDs, while Capital.com only offers share CFDs to its clients. Additionally, Capital.com not only offers Indonesian company CFDs, including state-owned and private firms like Bank Mandiri (PPERY), Bank Rakyat Indonesia (BKRKF), and SaranaMenara Nusantara (SMNUF) but also offers global share CFDs.

Trading Commission

Commission is an important factor to look out for in a broker when buying shares from Indonesia. Online brokers typically charge a fee or commission for every trade executed on their platform.

These fees can vary significantly between brokers and depend on the type of trade being made, such as a buy or sell order, as well as the size of the trade. Brokers have different pricing models for their services, with some charging a fixed fee for each trade while others charge a percentage of the trade’s value.

It’s important to note that some brokers offer commission-free trading, but investors should read the fine print to understand any additional fees or restrictions. Researching and comparing different online brokers is essential to ensure you’re getting the best deal on trading commissions. For beginners looking for an app to buy stocks, eToro offers minimal trading commissions and are worth considering.

What are the Popular Trading Platforms used to Buy Stocks from Indonesia?

To buy stock, brokers have developed trading platforms with a variety of features designed to enhance your chances of success and reduce trading risks. These custom-built trading platforms are tailored to meet your unique trading needs and are available for both desktop and mobile devices. While looking for apps to buy stocks, it’s worth noting that brokers also offer access to third-party trading platforms in addition to proprietary platforms to ensure a seamless and effortless trading experience.

Proprietary Trading Platforms and Apps

Every trader requires cutting-edge and user-friendly trading platforms to ensure a smooth and stress-free trading experience. Brokers grant access to their powerful trading platforms, empowering clients to design and automate an extensive range of stock trading strategies by utilizing the advanced features of their platforms. Accordingly, eToro tops our list due to its avant-garde in-house trading platforms, highly regarded by users for its ease-of-use and innovative design Cherry on the top, numerous brokers provide mobile trading applications to assist their clients in trading from anywhere. With mobile apps, clients can access a diverse range of portfolios that cover a wide range of investment areas, such as private equity, infrastructure, technology, and healthcare.

MT5 Platform & App

Many online brokers provide a powerful and futuristic third-party MT5 platform – a robust and flexible trading platform that provides traders with an array of advanced charting features, personalized indicators, and various analytical tools to facilitate well-informed trading choices.

To buy shares, MetaTrader5 or MT5 also offers an ultra-modern and user-friendly mobile app, providing users with an on-the-go trading experience. Traders can conveniently analyze market data, execute trades, and monitor their positions using the MT5 mobile app. All thanks to its advanced features and intuitive interface, which provide access to the markets at any time.

Why should I Buy Stocks?

Investing in the stock market means owning a piece of a company, and potentially getting rewarded through dividends or share value appreciation. Compared to keeping money in a savings account, investing can yield significantly higher returns. The key is to buy stocks in a company that you believe in, one that you use or interact with in your daily life. By doing so, you gain an advantage in identifying a good investment opportunity.

Successful long-term investing requires holding onto a business for 5-10 years, and this is easier to do if you invest in a brand you truly believe in. However, while considering stocks to buy now, it’s worthwhile to note that buying stocks also comes with risks. The stock value can be unstable and susceptible to changes in the market. This means that stock prices can rise and fall rapidly in response to changes in economic conditions, industry trends, or other factors. Additionally, there is always the risk of a company going bankrupt or facing financial difficulties, which could lead to a loss of value for shareholders.

Is Buying Stocks Worth the Risk?

Stock market investments can pave the way for long-term wealth accumulation. Investing in stocks can be a potentially lucrative venture, with many examples of top-performing stocks such as Amazon and Meta that have increased in value since their IPOs. Yet, when assessing stocks to buy now, it’s worth noting that there is always a risk associated with investing in the stock market, and not all stocks will perform well. Many stocks have appreciated in value significantly since their IPOs, and early investors have seen impressive returns on their investments. For example, Apple went public in 1980 at $22 per share and is now worth over $2.4 trillion, with a share price of around $157 as of March 2023. Regardless, keep in mind that investing in stocks comes with inherent risks, including market volatility and the potential for stocks to lose value over time. Despite these risks, many investors find that the potential rewards of investing in stocks are worth it. Researching and diversifying your portfolio is crucial, primarily when investing in top stocks to buy today.

What Reddit and Quora Say About Buying Stocks from Indonesia

Users on social networking platforms like Reddit and Quora often seek advice from other users on how to purchase shares in Indonesia. Below are some of the discussions among users on this topic.

Reddit

Reddit is a social platform where users post various queries, engage in discussions and vote on various matters. While searching through Reddit, we found various threads regarding how to buy shares from Indonesia, and users were curious to know the details. People generally were optimistic about the performance of Indonesian stocks.

This Reddit user was advising others on buying shares online and had started investing in stocks. In his view, finding companies with healthy financial positions and strong positions in their respective market is vital. He found Telkom a good option since they own Telkomsel, the market leader in the mobile industry.

Another Reddit user, “PlainBust”, commented on a post regarding learning more about the Indonesian stock market, that from an outsider’s perspective Indonesian raw food industry seems to be the best option for the long term.

Quora

Quora is a popular online platform where users can ask and answer questions on a wide range of topics, including but not limited to technology, business, health and finances.

While searching through Quora regarding how to buy stocks from Indonesia, we found various threads regarding investing in Indonesia, and there were mixed opinions about buying shares there. Some users were positive about stocks’ performance and urged others to start investing, while others were unsatisfied due to political reasons.

This particular user on Quora is more inclined to invest in stocks rather than gold, cars or investing in properties. In his view, stocks are high-risk but are high-profit investments if played safe.

This user commented on the query related to how to purchase Indonesian stocks, that you can sign up with Indonesian brokers to start trading in their market. He said he would personally go for those shares included in ETFs that are available in US exchanges.

Bottom Line

This guide provides readers with a step-by-step process on how to buy stocks from Indonesia, which involves understanding stock market fundamentals, conducting research on companies, selecting a brokerage, placing orders, and monitoring investments. Making informed decisions based on thorough research is crucial to achieving financial objectives. Additionally, various stockbrokers offer their users both CFDs and real shares for purchasing stocks in different markets, with access to in-house or third-party platforms.

When selecting a broker, it’s essential to consider factors such as their regulation, the markets they offer, their fees and commission structures, and the trading platforms they provide. Also assess their trading tools, research analysis, and educational content before making your final decision. That being said, evaluating personal investment objectives and risk tolerance and choosing a regulated broker are necessary steps before thinking to buy shares.