JAKARTA (Reuters) -Indonesia’s financial regulator will raise the minimum free float requirement for listed firms to 25% from 7.5% currently in stages, state news agency Antara reported on Saturday, in a bid to improve market liquidity.
The regulator will soon gradually raise it first to 10%, including on future initial public offerings, before eventually reaching the intended target at 25%, Antara said citing Financial Services Authority’s head of capital market supervision Inarno Djajadi.
“This has become a very serious review for us and hopefully we can implement it in the near future. Currently, the free float of Indonesia’s stock exchange is 7.5%, below the regional average.” Inarno said.
Free float refers to the number of shares of a public company that are freely available for trading on the stock market.
Southeast Asia’s largest economy has been considering whether to raise the requirement for some time. In 2015, the authority weighed whether to increase it to a range of 10% to 20%.
(Reporting by Stefanno Sulaiman, Editing by Louise Heavens)
