JAKARTA. The issuers listed on Indonesia Stock Exchange (IDX) were supposed to comply with the requirement to have a minimum free float of 7.5% by June 2016. However, some of the issuers have not yet complied with the rule of game.
Based on KONTAN investigation, there are at least 37 issuers that have not yet complied with the requirement. To date, those 37 issuers have the total value of Rp 211.32 trillion market capitalization. The number is equal with 3.69% of IDX’s market capitalization that amounts to Rp 5,720.40 trillion.
Only five out of 37 issuers that have booked market capitalization of more than Rp 10 trillion, while others have less than Rp 10 trillion market capitalization.
Previously, IDX has issued ultimatum: fail to comply with requirement will be fined Rp50 million. Indeed, there were issuers that finally applied for go private and delisting from IDX after failed to comply with the free float requirement. For an example, PT Sorini Agro Asia Corporindo Tbk (SOBI) only recorded free float of 2%. SOBI is planning to request for approval from extraordinary shareholders on 28 February 2017 to go private and delisting.
IDX is conducting analysis on data of issuers that have free float of less than 7.5%. Director of Company Assessment of IDX Samsul Hidayat claimed that the IDX has tried to approach the issuers to comply with the minimum free float of 7.5%.
One of the issuer, which has not complied with the free float regulation, is PT Chandra Asri Petrochemical Tbk (TPIA). “We are trying to comply with the provision,” said Head of Investor Relations of TPIA Hary Tamin.
So far, TPIA has just booked free float of 4.22%. In other words, this company has to offer 3.28% more of shares to public. IDX has sent a letter to TPIA related to free float provision. However, TPIA has not yet decided the strategies to comply with the regulation. But the company will definitely comply with the provision in this year.
Director of Investa Saran Mandiri Hans Kwee assessed that the free float regulation is essential to generate market liquidity. In this case, IDX is supposed to impose sanctions, such as fine or delisting for those which fail to comply with the regulation. The forced listing will not have significant effect to Jakarta Composite Index (JCI). “The low free float indicates low liquidity,” Hans said.
Analyst of Asjaya Indosurya Securities William Surya Wijaya said, the issuers are supposed to comply with the free float regulation to boost domestic stock market. “They are supposed to comply with the regulation if they feel comfortable of listing on the stock exchange,” he added.
(Muhammad Farid/Translator)
