IDX Reforms Push Jakarta Index Up 5%; EIDO Yield, Dividend Growth in Focus

The Jakarta Composite Index rose more than 5% on Oct. 20, snapping a two-day slide. The move followed the Indonesia Stock Exchange's decision to exclude stocks with concentrated ownership from the main index, a block that carries an 18% weight. The exchange also committed to stricter disclosure for investors holding at least 1% of a company's shares.

The exchange said the changes address MSCI's concerns over shareholding transparency. The disclosure rules are designed to improve market integrity and align with global standards. A stated goal of the reform is to avert a downgrade of Indonesia's market classification by MSCI.

The iShares MSCI Indonesia ETF (EIDO) gives diversified exposure to the market. The fund has a market capitalization of $337 million. EIDO yields 6.07%. Its payout ratio is 59%, and its dividend has grown at a compound annual rate of 9.63% over three years, according to GuruFocus data. GuruFocus describes the payout ratio as moderate and supported by earnings and cash flow.

GuruFocus' GF Value model estimates EIDO's intrinsic value at $16.57 per share, roughly 42% above the current market price of $9.61. The valuation label flags the underlying data as out of date. The GF Score of 82/100 reflects a growth rank of 9 and a profitability rank of 8, balanced by a financial strength score of 4.5.

A single premium guru holds EIDO, with one guru adding to the position in recent quarters. No guru trimmed. Insider activity is absent, which is normal for an ETF structure. The fund's trailing price-to-earnings ratio is 44.89x. No five-year median is available for comparison, and no forward P/E is reported.

The new disclosure rules and the ownership exclusion take effect ahead of MSCI's ongoing classification review.