The Indonesia Stock Exchange (IDX) will summon 18 listed companies to explain why they did not comply with the new minimum 7.5 percent free float regulation (free float is the number of companies' outstanding shares available to the public for trade). This new regulation, announced in January 2014, stipulates all listed companies on the IDX to have a minimum free float ratio of 7.5 percent per 31 January 2016 (BEI No. Kep-00001/BEI/01-2014). This regulation was designed in an attempt to boost market liquidity and raise trade volume on the IDX.
Besides the minimum free float rule, BEI No. Kep-00001/BEI/01-2014 also requires all listed companies on the Indonesia Stock Exchange to have at least 300 shareholders.
Samsul Hidayat, Director of Corporate Listing at the IDX, said the IDX had previously already sent letters to the companies involved. However, one month after implementation of the regulation 18 companies have still not complied with the minimum free float rule, while 41 companies have still not complied with the minimum shareholder rule. The IDX will now, one by one, summon each company to visit the IDX and explain their reluctance to comply with existing regulations. If these companies continue to flout regulations, then they can be suspended from trading.
Even after the regulation came into effect (on 31 January 2016) the IDX still granted time for these companies to adjust their free float and shareholder composition. The IDX may be somewhat careful with imposing sanctions against the companies as they could decide to delist from the IDX, while the IDX is in fact eager to raise the number of listed companies in Indonesia.
This year the IDX targets to see between 30 and 35 initial public offerings (IPOs) on the Indonesia Stock Exchange, up from 15 listings (worth a combined USD $860 million) in 2015, due to better economic conditions (both globally and domestically).
Indonesian companies that have not complied yet with 7.5% minimum free float ratio:
|Alakasa Industrindo||Tembaga Mulia Samanan|
|Austindo Nusantara Jaya||Asuransi Bintang|
|Bank CIMB Niaga||Multi Prima Sejahtera|
|Century Textile Industry||Akasha Wira International|
|Eratex Djaja||Kedaung Indah Can|
|Lotte Chemical titan||Perdana Bangun Pusaka|
|Keramika Indonesia Assosiasi||Merck Sharp Dohme Pharma|
|J Resources Asia Pasifik||Nusantara Inti Corpora|
The IDX announced it plans to speed up the IPO process by reducing paperwork and instead let companies register the IPO online. Tito Sulistio, General Director of the IDX, said the whole IPO process can be sped up by two to three weeks (normally it requires about 13 weeks to complete the registration process.
The IDX is in talks with Indonesia's Financial Services Authority (OJK) to get this plan off the ground. The IDX also plans to open a branch in Surabaya (East Java) in order to serve those companies located in the eastern part of Indonesia.