Wisudanto, - and Tika Widiastuti, - and Lily Cania, - (2020) Tick size change and market liquidation in the Indonesia stock exchange. Advances in Business, Management and Entrepreneurship: The 3rd Global Conference on Business, Management and Entrepreneurship (the 3rd GC-BME 2018), 1. pp. 487-493. ISSN 9780429295348

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Abstract

One action taken by the Indonesia Stock Exchange (IDX) in order to compete with members of the World Federation of Exchange (WFE) is changing the tick size. It is hoped that an increase to a five tick size in the price group will increase liquidity. This research used the bid–ask spread and depth was estimated using stock volume in closing price before and after a new tick size policy was applied in each price group. We used the nonparametric test to examine the mean difference in two related samples. An increase in the tick size leads to increases in the spread. Bid depth and ask depth also increased; however, ask depth did not show any difference. Therefore, to eliminate the ambiguity this study used the depth to relative spread ratio, which resulted in a broader spread. The IDX needs to consider a tick size that can increase liquidity in each stock price group, which therefore becomes more attractive for investors.

Item Type:	Article
Subjects:	H Social Sciences H Social Sciences > HG Finance H Social Sciences > HG Finance > HG4501-6051 Investment, capital formation, speculation H Social Sciences > HG Finance > HG4501-6051 Investment, capital formation, speculation > HG4551-4598 Stock exchanges
Divisions:	04. Fakultas Ekonomi dan Bisnis > Manajemen
Creators:	Creators NIM Wisudanto, - UNSPECIFIED Tika Widiastuti, - NIDN0730128301 Lily Cania, - UNSPECIFIED
Depositing User:	Tn Sugeng Riyanto
Date Deposited:	01 Mar 2022 03:32
Last Modified:	01 Mar 2022 03:32
URI:	http://repository.unair.ac.id/id/eprint/113884
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