Indonesia to force billionaires to sell shares: loosen control or lose market status
Index compiler MCSI says Indonesia must address ‘fundamental investability issues’ or risk being downgraded from emerging to frontier market
At least three billionaires directly control 85 per cent or more of three listed companies, based on recent filings. Southeast Asia’s richest person has a more than two-thirds indirect stake in Barito Renewables Energy, Indonesia’s largest listed firm. And about seven billionaires own more than 50 per cent of shares in at least 13 companies.
That concentration is now colliding with regulatory reform. Indonesia’s market watchdog said newly listing firms will be required to double their minimum free float – the number of shares available for public trading – to 15 per cent. Companies already trading will have to follow eventually too.
The recent MSCI statement gave the market “a bloody nose”, said Hasnain Malik, head of emerging-markets equity and geopolitics strategy at Tellimer in Dubai. The announcement “highlighted investor concerns on low free float, opaque shareholding structures, and scope for share price manipulation by related parties”.