Indonesia's Financial Services Authority (OJK) plans to progressively increase the minimum free-float requirement for listed companies, aiming for a 25% threshold in stages (10%, then 15%). This initiative, announced by OJK's capital market supervision head Inarno Djajadi, is designed to deepen stock market liquidity and attract greater investor participation, though a specific timeline for these changes has not yet been provided.
Indonesia's Financial Services Authority (OJK) intends to progressively raise the minimum free-float requirement for listed companies, ultimately targeting a 25% threshold. This policy, announced by OJK's capital market supervision head Inarno Djajadi, will be implemented in stages, moving from 10% to 15% before reaching the final level. The specific timeline for these changes remains undisclosed, introducing an element of uncertainty regarding implementation pace. The primary objective of this regulatory adjustment is to enhance stock market liquidity and attract greater investor participation within the Indonesian market. A higher free-float typically increases the supply of shares available for public trading, potentially improving price discovery and reducing volatility. This move is consistent with broader efforts to mature emerging market financial infrastructure. The market sentiment surrounding this announcement is moderately positive and optimistic, indicating an expectation of favorable long-term outcomes. A higher free-float could lead to increased trading volumes and potentially greater inclusion in global indices for eligible companies, attracting passive and active foreign capital. However, companies currently below the proposed thresholds will face compliance requirements, potentially necessitating secondary offerings or share sales by existing large shareholders.
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