Faced with global scrutiny, Indonesia Stock Exchange set for $11 billion share release

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By Stefanno Sulaiman and Gayatri Suroyo Nearly one in three companies on the Indonesia Stock Exchange, including some of its biggest listings, would be affected by capital market reforms pledged by Jakarta, potentially unleashing over $11 billion in new share supply, according to a Reuters analysis of public data and an IDX official.Indonesia announced a series of capital market reforms after index provider MSCI NYSE:MSCI in late January warned the country risked a downgrade to frontier status as early as May due to market opacity that may have facilitated price manipulation.A key part of the plan is raising the minimum free float level for listed companies to 15% from 7.5%.That would mean 267 companies, out of over 900 listed on the IDX, would have to release new shares, have their controlling shareholders sell some of their stakes, or buy back equity to go private, according to an IDX assessment as of end-2025.Assuming no company chooses to delist, they would have to offer a combined 187 trillion rupiah ($11.08 billion) worth of shares to the public, IDX director I Gede Nyoman Yetna said."If properly designed, the 15% free float increase could become a turning point for the quality ... and the attractiveness of Indonesia's capital market," said Liza Camelia Suryanata, head of research at Kiwoom Sekuritas Indonesia. "However, if executed without sensitivity to liquidity dynamics and price stability, short-term volatility risks could erode the very confidence this reform seeks to build," she said.Exchanges around the world have long grappled with how to encourage trade in tightly-held stocks. In Japan, a slew of corporate governance reforms, including asking companies to maintain a 35% minimum free float, has helped the market as a whole and put it on the radar of many foreign investors.Reuters analysed publicly available data to see which Indonesian companies would be most affected.THE TOP 5Topping the list is Indonesian giant Barito Renewables Energy IDX:BREN, IDX's biggest company by market capitalisation. The company, owned by Indonesian billionaire Prajogo Pangestu, will have to sell more than $1.8 billion worth of shares to meet the 15% threshold, according to Reuters analysis of publicly available data.The other names in the top 5 are Bank Permata IDX:BNLI, whose majority shareholder is Bangkok Bank, which could have to offer around $450 million in...

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