Key Takeaways
- • The Indonesia Stock Exchange (IDX) removed the 5 trillion rupiah ($276.93 million) market cap threshold for screening companies that breach high shareholding concentration rules, according to Reuters.
- • The list of high shareholding concentration stocks now stands at 383 companies, an increase of 300, representing an additional 6.16% of the Jakarta Composite Index's total market cap.
- • Stocks on the list are excluded from the calculation of the Jakarta Composite Index, an exclusion in effect since November 2.
- • The 'price impact ratio' will not be considered in the screening process, per IDX CEO Jeffrey Hendrik.
- • The reform follows a warning from MSCI that it could downgrade Indonesia's stock market to 'standalone' status, prompting further transparency measures in listed companies' shareholding structures.
Summary
The Indonesia Stock Exchange (IDX) said on Tuesday that it had removed the 5 trillion rupiah ($276.93 million) market capitalization threshold used to screen companies that breach high shareholding concentration rules, according to Reuters. IDX CEO Jeffrey Hendrik said that stocks with market caps below 5 trillion rupiah are also instruments in which global and domestic investors invest, and therefore must be given the same level of transparency.
The change is the latest in a series of capital market reforms by Indonesia aimed at improving transparency around the shareholding structures of listed companies. The move follows a warning from global index provider MSCI that it could downgrade the country's stock market to 'standalone' status. Hendrik added that the 'price impact ratio' will not be taken into account in the screening.
Following the changes, 383 stocks are now on the high shareholding concentration list, an addition of 300 companies. The newly added stocks represent an additional 6.16% of the total market capitalization of the Jakarta Composite Index, the CEO said.
IDX has stated that stocks on the list will be excluded from the calculation of the Jakarta Composite Index. The exclusion has been in effect since November 2. Figures are based on an exchange rate of $1 = 18,055 rupiah.
The change is the latest in a series of capital market reforms by Indonesia aimed at improving transparency around the shareholding structures of listed companies. The move follows a warning from global index provider MSCI that it could downgrade the country's stock market to 'standalone' status. Hendrik added that the 'price impact ratio' will not be taken into account in the screening.
Following the changes, 383 stocks are now on the high shareholding concentration list, an addition of 300 companies. The newly added stocks represent an additional 6.16% of the total market capitalization of the Jakarta Composite Index, the CEO said.
IDX has stated that stocks on the list will be excluded from the calculation of the Jakarta Composite Index. The exclusion has been in effect since November 2. Figures are based on an exchange rate of $1 = 18,055 rupiah.
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