JAKARTA: Indonesia's Financial Services Authority (OJK) has extended a policy allowing listed companies to buy back their own shares without shareholder approval until June 2027, amid efforts to strengthen market stability following a sharp stock market sell-off.
OJK's chief executive of Capital Markets, Financial Derivatives and Carbon Exchange Supervision Hasan Fawzi said the extension, from December 2026, responded to requests from listed companies seeking greater certainty over the timeframe, with some considering current share prices favourable for such transactions.
"We also emphasise that these buybacks must not disregard the minimum free-float requirement, as this does not contradict our efforts to increase the proportion of shares available for public trading," he told a press conference here on Monday.
The extension follows a sharp decline in Indonesia's benchmark Jakarta Composite Index (IHSG) on Oct 16, which triggered a temporary trading halt after global index provider MSCI announced a possible reclassification of the country's equity market.
Hasan said the index subsequently gained 4.9 per cent during the Oct 19-23 trading week, after touching a low of 4,907.37 points on Oct 19, before closing at 5,439.2 points last Friday.
Meanwhile, Indonesia Stock Exchange (IDX) president director Jeffrey Hendrik said global index provider FTSE Russell had reaffirmed Indonesia's classification as a Secondary Emerging Market during an online meeting on Oct 23, following discussions on reforms covering transparency, liquidity and market surveillance.
"FTSE Russell confirmed that its Oct 6 report clearly maintained Indonesia's classification as a Secondary Emerging Market. Indonesia was not even placed on its watchlist," he told the same press conference.
Jeffrey said IDX would introduce more targeted surveillance measures to detect suspected share price manipulation, including publicly announcing investigations and potentially restricting or suspending specific securities accounts, with consultations involving exchange members scheduled for this week.
He said IDX would also expand its High Shareholding Concentration committee to nine members, comprising four representatives from market self-regulatory organisations and five independent external members from the financial industry, academia and investment community.
He said the move was aimed at strengthening transparency, governance and the credibility of the process used to identify stocks with highly concentrated ownership. - Bernama
