With the emergence of digital investment platforms and the abundance of financial advice floating around online, more Indonesians are exploring investment opportunities in the capital market today. Based on data from the Indonesian Central Securities Depository, there were 5.6 million stock investors in June 2021, an increase of 44.45% compared to the end of 2020, when there were 3.88 million.
This new crop of investors are mostly millennials and Gen Z. They tend to seek information through social media, matching habits that were formed in their younger years. Plenty of figures serve up content related to financial planning on Instagram, TikTok, and other platforms. But recent developments indicate that some of the advice being dished out may originate from questionable sources.
Ahmad Rifai, a former journalist and startup watcher, posted a Twitter thread about his discovery of tweets that all have the hashtag #BeliBuka (“buy Bukalapak”) circulating since July 9, when the e-commerce unicorn announced its plan for an IPO publicly. The keyphrase “beli saham Bukalapak” (“buy Bukalapak shares”) was the 12th highest trending topic on July 9 in the hour following 10:00 p.m., according to a snapshot Rifai uploaded on the thread.
“The tweets didn’t seem to appear organically, it looks like they were organized using certain keywords. Many of those tweets were made by new accounts, so I’m not sure if they are real users [or paid bots and paid commentators],” Rifai told KrASIA. He also compiled a list of over 1,000 tweets with the hashtag #BeliBuka.
On the day of Bukalapak’s debut on the Indonesia Stock Exchange, many social media users, including public figures, tweeted out the hashtag #BukalapakIPO. However, Rifai spotted a number of suspicious tweets containing an invitation to buy shares of the freshly listed stock.
“What’s interesting is that there were tweets mentioning Cathie Wood, the CEO of New York-based investment management firm ARK Invest. It looks like these users know about investments and they want her to be aware that Bukalapak has gone public,” Rifai said. The tweets often looked like this:
@CathieDWood Indonesia is calling youu!! for #bukalapakIPO @ARKInvest let’s gooo!
— Michael G @mclgnwnn
Calling Mrs @CathieDWood to come to Indonesia with love #bukalapakIPO
— Purnomo Tanugraha @purmonotanu
It is unclear whether Bukalapak, investment firms, or other business entities are behind these tweets. When contacted by KrASIA, Bukalapak declined to comment on this matter due to its blackout period after the company’s IPO.
Legal gray zone
Promoting specific stocks can be seen as unethical and even manipulative if the party doing so drives profit for themselves, especially if their content contains misleading information.
“Indonesia, like most countries in the world, imposes certain regulations around the marketing of public equities,” said Joel Shen, partner at global law firm Withers, to KrASIA. “This means the regulator prohibits marketing activities containing false or misleading information which gives the impression that certain equities are appropriate investments for a party who cannot bear the risk.”
Any published content that contains a recommendation to buy, sell, or hold an equity or other investment instrument is required to include certain information, such as the financial instrument’s market value when the recommendation was made, details about the qualifications of the person offering the recommendation, and whether the party providing the recommendation has any relation to the company in question. It also must include a section on risk factors, Shen added.
“Financial advice is a regulated activity and only those who are licensed by Indonesian financial authority (OJK) can provide them,” he said.
However, there is a gray area between providing information and giving advice, and the classification depends on the nature of the contents.
“For example, if someone says, ‘I bought 1,000 shares of this company and the price increased three times overnight,’ is that marketing advice? I don’t think so, because it’s factual and he didn’t recommend other people to buy the shares. But if someone says, ‘This company’s IPO was oversubscribed, I bought some shares so you also should go and buy these shares,’ then this person is entering dangerous waters,” Shen explained.
The controversy surrounding investment promotions reared up on social media earlier this year when two prominent celebrities, Raffi Ahmad and Ari Lasso, posted promotions for the stock of M Cash Integrasi on their social media accounts. The Indonesia Stock Exchange, or IDX, then summoned the two figures to inform them of the rules related to financial recommendations in the public sphere.
“This is a new phenomenon where there is a surge of retail transactions, and there is much content [related to investments] from influencers on social media. Although there is regulation for this, we use an educational approach for these influencers,” said IDX director of trading Laksono Widodo to local media outlet Tirto on January 6. Both Ahmad and Lasso quickly clarified that they intended to share their own investment experience without any intention to provide financial advice. M Cash Integrasi denied any involvement with the two celebrities.
Activities with the underlying intention to influence other parties to buy, sell, and hold securities are considered to be market manipulation and carry legal consequences, with a maximum prison sentence of ten years and a maximum fine of IDR 15 billion (USD 1 million), as stated in Article 104 of Indonesia’s capital market laws.