JAKARTA (Reuters) – Indonesia has completed the stock market reforms that were requested by index providers, a senior official said on Thursday, part of efforts to restore investor confidence in Southeast Asia’s biggest economy.
Authorities will publish a list of stocks with high shareholder concentrations after the market closes on Thursday, Hasan Fawzi, chief capital market supervisor of the Financial Services Authority (OJK), told reporters.
Indonesia unveiled a raft of proposed capital market reforms after index provider MSCI in late January warned that the country was at risk of being downgraded amid concerns about a lack of transparency around stock ownership and trading, which triggered mass selloffs.
Around $120 billion of market value was wiped out on Jakarta’s stock exchange (IDX) after MSCI’s warning. So far this year, the index has dropped more than 17%, putting it among the worst-performing stock markets in Asia, with the Middle East war also compounding the pressures.
Reforms pledged by Jakarta include the release of more detailed shareholder data and the doubling of the minimum “free float” of tradeable shares for listed companies to 15%, a move aimed at increasing liquidity and preventing the manipulation of stock prices.
The Indonesia stock exchange has this week issued implementing regulations for the free float requirement, giving firms up to three years to comply.
“We will continue firm actions against violations in the capital market, including stock movement manipulation, to restore trust,” Hasan told reporters.