Stocks in Indonesia are very varied. One of the most popular and considered as highly liquid stocks is the LQ45 stock index. Then, what exactly is the meaning of the LQ45 stock index?
Some professional investors must be familiar and familiar with this stock term. However, for those of you who are still beginners, understanding the various stock indices is very necessary.
One of them is understanding the LQ45 stock index. Moreover, LQ45 shares are also considered very suitable for novice investors. The following is a brief description of the LQ45 stock.
Definition of LQ45 Stock Index
As the name suggests, it turns out that the LQ45 stock index is the most liquid stock. Actually, it can be seen from the name, LQ which means liquid = liquid, and 45 is the number of shares.
Discussing about liquid stocks, it means stocks that have a lot of interest so that they are easy to trade. Here the meaning is traded on the IDX (Indonesian Stock Exchange).
LQ45 shares that have been since 1997 it has attracted the attention of many investors. The fans out there are also very large and make it easy for you to resell them.
Another important thing is that the process of selling and buying shares can take place quickly, because there will always be someone in line.
This flagship stock has gone through a rigorous process so that 45 issuers with high liquidity have been selected. In its own implementation, the 45 issuers will also be monitored every half year.
Before discussing the turnover and purpose of LQ45 shares, you need to know about the difference between liquid and illiquid shares.
Difference between liquid and illiquid stocks?
Liquid stocks have been mentioned a bit earlier. Where means active and easy to trade. By choosing this stock, you can easily sell in a fast time.
In contrast to illiquid stocks, which are of course the opposite of liquid. You will find it difficult to sell it. illiquid shares (illiquid) will definitely be avoided by investors because it has very few fans.
In fact, you may have to sell the stock at a price lower than the stock market price if you choose illiquid stocks.
When does the LQ45 Stock Switch occur?
As mentioned earlier, there will be a selection and strict supervision carried out by the IDX.
An assessment of stock movements will be carried out in three months, then in February and August a stock exchange will be held. That means every 6 months will always be updated.
What are the Purposes of the LQ45 Stock Index?
LQ45 shares are very beneficial for investors. Especially if you want to make observations on stocks with high liquidity. Investors will be facilitated in making selections to achieve large profits in the future.
LQ45 shares are also often used as a tool for capital market observers when analyzing stock movements on the IDX.
What are the LQ45 Stock Criteria?
As most shares There are several criteria that issuers must have to be taken into account in the LQ45 index. The criteria in question include:
Has been listed on the IDX for at least 3 months
Included in 60 shares in the regular market, of which 30 will be listed as issuers for the LQ45 . index
For a total of 45 shares, 15 more shares are needed. The consideration is seen from transactions in the regular market, so that the top 15 shares were selected based on market capitalization.
From the top 30 stocks in the first criteria, and 15 stocks under consideration for market capitalization, 45 stocks have been selected.
For the record, there are other considerations that are also considered. For example, the condition of the company starts from its growth and its finances are not problematic.
By knowing the meaning of the LQ45 stock index, you may be able to be more careful in choosing stocks. Especially if you are a beginner. Starting a career as an investor by buying stocks with the LQ45 index would be the right choice.