Which Companies Fail to Comply with IDX's Minimum Free Float Rule?
The Indonesia Stock Exchange (IDX) could force companies to delist if they will not comply with the minimum 7.5 percent free float regulation soon. Back in January 2014 the IDX announced it would force all listed companies 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 effort to boost market liquidity and raise trade volume on the IDX.
However, although the deadline passed more than one-and-a-half years ago, there remain nine companies that are yet to comply with the minimum free float regulation (see table below). IDX General Director Tito Sulistio said he still waits for these nine companies to adjust their share composition to the new rule and therefore invites these companies to send their plans to the IDX. Sulistio warned that if the nine companies will not comply with the free float rule, then the maximum penalty would be a forced delisting from the Indonesia Stock Exchange.
Samsul Hidayat, Director of Corporate Listing at the IDX, said trading of these nine companies' shares has already been suspended. He added that there are actually more companies that still need to comply with the minimum 7.5 percent free float rule. However, they have shown their commitment to adjust to new regulations and therefore have not been suspended from trading. These companies are Bank CIMB Niaga, Golden Energy Mines, and Chandra Asri Petrochemical.
Among the companies that were suspended from trading is Keramik Indonesia Assosiasi, one of Indonesia's major producers of ceramic tiles. The Siam Cement Group owns a 96.31 percent stake in this company through SCG Building Materials Co. Ltd, while the remaining 3.69 percent is publicly traded on the Indonesia Stock Exchange. Vikron Phongsathorn, Investment Coordinating Manager of SCG Indonesia, said the company is eager to comply with the minimum 7.5 percent free float regulation and is currently searching strategic investors. However, considering Indonesia's ceramic industry is experiencing a difficult period, the company struggles to find an interesting party, either at home or abroad.
Companies that have not complied yet with the 7.5% minimum free float ratio:
| Companies |
| Destinasi Tirta Nusantara |
| Danayasa Arthatama |
| Keramika Indonesia Assosiasi |
| Permata Prima Sakti |
| Skybee |
| Hotel Mandarine Regency |
| Trikomsel Oke |
| Grahamas Citrawisata |
| Taisho Pharmaceutical Indonesia |
Source: IDX