What is Unusual market activity?
One of the announcements often delivered by the Indonesia Stock Exchange (IDX) is unusual market activity (UMA).
According to IDX, UMA is the trading activity and/or price movement of an unusual securities for a certain period of time on the Exchange which according to the Stock Exchange assessment can potentially interfere with the implementation of regular, reasonable and efficient securities trading.
Nevertheless, the announcement of UMA does not necessarily indicate any violations in the capital market. This disclaimer is repeatedly conveyed by IDX in UMA's announcement of a share.
Referring to the definition, UMA is the price movement of a stock that is considered unusual or unnatural. Based on experience, the shares announced by UMA are stocks that have increased or decreased drastically over a period of time.
The stock has not infrequently experienced a top auto reject (ARA) or lower auto reject (ARB) within a few days. Most of the stocks that have been warned by UMA in 2020 are stocks that do not have the largest market capitalization in IDX.
UMA and Suspension :
Shares announced by UMA by IDX will not necessarily be stopped from trading by IDX. However, it does not close the possibility of shares announced by UMA by IDX then suspended in a relatively close time.
Why Was UMA Announced?
One of the reasons for the announcement of UMA by IDX is the hope for investors to consider various possibilities that may arise in the future before making investment decisions.
Thus, IDX reminds investors to keep an eye on the announcement before selling or buying certain stocks. Investors are also encouraged to observe all disclosures related to the issuer which are usually published publicly on the IDX website.
The disclosure of such information usually includes performance, corporate action plan to the issuer's management's answer to the exchange confirmation request. As is known, information is one of the factors that drives the price of a stock.