Indonesia’s move to double minimum free-float requirements and tighten ownership transparency rules may force some listed companies to delist, analysts warned.
According to Jin10, MSCI warned in January this year that Indonesia could be downgraded from “emerging market” to “frontier market” due to insufficient free float and opaque ownership structures, after which Indonesia announced related reforms.
Analysts said that although the Indonesia Stock Exchange and the Financial Services Authority are offering a transition period of up to three years based on company size, some firms may still struggle to meet the higher minimum free-float threshold of 15% of total shares.
Indonesia Stock Exchange data released in May showed that as of the end of March, only 566 of 956 listed companies had a free-float ratio above 15%.
The exchange also lowered the reporting threshold for shareholder holdings from 5% to 1%.
Yanuar Rizky, a senior economist at think tank Bright Institute, said some companies may choose to delist rather than take steps to raise their free float, while others may opt to go private instead of complying with the new shareholder transparency requirements.
In March, Indonesia’s Financial Services Authority said it expected the new rules to bring shares worth more than $11.4 billion into the free-float market.
Analysts said Indonesia’s capital market may not be deep enough to absorb that volume of newly tradable shares, which they said could put significant downward pressure on stock prices.
STOCKS | Indonesia’s Higher Free-Float and Disclosure Rules May Push Some Listed Firms to Delist
2026-06-24 14:42:43
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