Understanding PT Bank Central Asia Tbk's (BBCA) Stance on Stock Split Amidst Price Surge

The stock price of PT Bank Central Asia Tbk. (BBCA) surged to Rp10,025 per share on February 20, 2024, prompting discussions about potential stock split plans. However, Indonesia's largest private bank has expressed its reluctance to pursue stock split measures, citing reasons related to market liquidity and investor accessibility.

According to Jahja Setiaatmadja, President Director of BCA, the current share price remains affordable for retail investors, and the focus lies on maintaining market liquidity. Despite the relatively high share price, BCA's stock remains accessible to retail investors due to its liquidity in the market. Setiaatmadja emphasized the importance of balancing price considerations for both retail and foreign investors, ensuring that the share price remains attractive without compromising market stability.

"Investor sentiment is crucial, especially concerning market liquidity. We are grateful for the liquidity of our shares, which has remained robust. Despite the share price being close to Rp10,000, it is still affordable for retail investors. For foreign investors, it is also preferable not to deal with shares valued too low in terms of dollars," explained Setiaatmadja in a YouTube video by Mirae Asset Sekuritas, as quoted on Tuesday (February 28, 2024).

BCA's decision to maintain the current share price level of around Rp10,000 reflects its strategy to strike a balance between accessibility for retail investors and attractiveness for foreign investors. Setiaatmadja indicated that, for the time being, there are no immediate plans for a stock split, considering the current market dynamics.

Looking back at its history, BCA has undergone four stock splits. Three instances involved a 1:2 stock split ratio in 2001, 2004, and 2008. In 2021, BBCA executed a stock split with a ratio of 1:5 when the share price was around Rp30,000 per share.

In summary, BCA's decision not to pursue a stock split despite the surge in share price underscores its commitment to maintaining market liquidity and catering to the diverse needs of retail and foreign investors. By striking a balance between accessibility and attractiveness, BCA aims to sustain its position as a leading player in Indonesia's banking sector.

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