A sector groups companies that do similar things: banks with banks, miners with miners. The IDX uses its own classification, IDX-IC, with sectors such as Financials, Energy, Basic Materials and Consumer Non-Cyclicals.
Sectors help in comparing like with like. A bank and a coal miner earn money in completely different ways, so their figures are rarely comparable; two banks are.
A sector is a description, not a verdict. Being in one sector or another says nothing about whether a company is a good or a bad one.
Written by NUSANTARA as a general introduction. It explains a term; it is not advice about any security.
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