By Amanda Lee and Ying Xian Wong
Indonesia will give listed companies up to three years to meet a higher minimum free-float requirement in a bid to boost investor confidence.
The Indonesia Stock Exchange raised the minimum free float to 15% of total shares, from 7.5% previously, the bourse's corporate secretary Kautsar Primadi Nurahmad said late Tuesday.
"These changes form part of Indonesia's broader efforts to accelerate capital market reform, enhance the quality of listed companies, strengthen corporate governance, and reinforce investor protection," he said.
The move comes months after index providers FTSE Russell and MSCI Inc. halted reviews of Indonesian securities over transparency concerns.
MSCI in January froze certain index-related changes for Indonesian securities, while FTSE Russell in February postponed a scheduled review of Indonesian stocks.
Under the new rules, companies must comply in stages based on market capitalization.
Firms with a market value below 5 trillion rupiah, equivalent to $295 million, must meet the requirement by March 31, 2029. Companies valued at 5 trillion rupiah or more must raise their free float to 12.5% by March 31, 2027, and to 15% a year later. Those already between 12.5% and 15% must reach 15% by March 31, 2027.
"This is less about liquidity alone and more about addressing long-standing concerns around concentrated ownership, weak price discovery, and limited investability for global funds," said Maybank Sekuritas's head of research, Jeffrosenberg Chenlim.
The move also aligns Indonesia more closely with global standards and responds to concerns of foreign investors and index providers, he said.
Write to Amanda Lee at amanda.lee@wsj.com and Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
04-01-26 0454ET
