The Indonesia Stock Exchange (IDX) has officially released\nAnnouncement Number Peng-00065\/IDX.POP\/04-2026, which regulates the\nadjustment of evaluation criteria for the IDX30, LQ45, and IDX80\nindices.<\/p>\n
The policy, signed on 21 April 2026 by the Head of the Trading\nRegulation and Operations Division, Pande Made Kusuma Ari A., and Acting\nHead of the Research Division, Heidy Ruswita Sari, was issued to respond\nto the need for indices to be more representative of current market\ndynamics.<\/p>\n
The adjustment to these rules is scheduled to be implemented in the\nmajor April 2026 evaluation and will take effect on the first trading\nday in May 2026.<\/p>\n
Integration of High Shareholding Concentration (HSC) Criteria<\/p>\n
In the update to the index selection universe criteria, the exchange\nauthority has established a crucial new requirement: stocks must not\nfall into the High Shareholding Concentration (HSC) category.<\/p>\n
The exchange\u2019s step to exclude issuers with excessively concentrated\nownership is a form of fundamental harmonisation with global capital\nmarket operational standards.<\/p>\n
Historically, HSC-status stocks have the potential to trigger price\nvolatility anomalies due to the limited supply of freely circulating\nshares in the regular market. By applying this criterion, the IDX aims\nto eliminate valuation distortions so that the movement of major indices\ntruly reflects organic market liquidity and demand conditions.<\/p>\n
Update to Free Float Ratio and Liquidity Relaxation<\/p>\n
In addition to the HSC aspect, the IDX has adjusted the reference\nlimits for the public share ownership ratio or free float. The selection\ncriteria for the IDX80 index universe, drawn from the top 150 stocks by\ntrading value in the regular market over the last 12 months and JCI\nconstituent stocks listed for more than six months, now require a\nminimum free float ratio of 10%.<\/p>\n
However, this provision also requires compliance with the limits set\nin Regulation Number I-A as of 31 March 2026 and Circular Letter Number\nSE-00004\/IDX\/03-2026, where the exchange will use the higher percentage\nlimit between the two.<\/p>\n
Interestingly, the exchange authority has also provided specific\nrelaxation on trading transaction eligibility aspects. In previous\nrules, stocks entering the selection stage were required to have never\nbeen suspended and to be traded every day within the last six\nmonths.<\/p>\n
Through this latest adjustment, that operational requirement has been\nrelaxed to a maximum of one day without transactions within the\nsix-month period.<\/p>\n
This relaxation provides more realistic space for issuers with good\nfundamentals that may have temporarily experienced no crossing\ntransactions (matching orders) on a single trading day.<\/p>\n
Alignment of Governance with International Standards<\/p>\n
Screening index constituents by considering public share availability\nlimits has long been a prudence standard in various global\nexchanges.<\/p>\n
Similar preventive measures are applied by the Tokyo Stock Exchange\nthrough its Prime Market classification, as well as by Hong Kong\u2019s\ncapital market authorities, which strictly monitor issuers with\nconcentrated ownership to mitigate price manipulation.<\/p>\n
Furthermore, this adjustment aligns domestic parameters with the\nmethodologies of international index providers, such as MSCI, which are\nhighly stringent in focusing on free-float adjusted market\ncapitalisation.<\/p>\n
Consequences for Institutional Portfolio Rotation<\/p>\n
Strategically, this tightening of evaluation criteria will bring\ndirect positive implications to the domestic capital market ecosystem.\nAhead of the rule\u2019s effectiveness in May 2026, significant portfolio\nrebalancing is projected by institutional investment managers using the\nIDX30 and LQ45 indices as underlying assets.<\/p>\n
Although to date only two issuers monitored as still in HSC within\nthese three reference indices\u2014PT Barito Renewables Energy Tbk (BREN) and\nPT Dian Swastatika Sentosa Tbk (DSSA)\u2014investors should remain vigilant\nas updates on HSC issuers will continue to be published over time.<\/p>\n
Large-capitalisation issuers indicated as entering the HSC radar will\nbe encouraged to promptly reorganise their ownership structures\u2014such as\nthrough corporate actions\u2014if they wish to maintain their positions in\nthe reference indices.<\/p>\n
Ultimately, the IDX\u2019s more comprehensive screening instrument is\nbelieved to be able to mitigate potential sudden capital outflows, which\noften colour the market during global index adjustment periods.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/idx-clean-up-of-indices-what-has-changed-1776916405", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }