Foreign ownership limit removed

JAKARTA (JP): Foreign investors are now allowed to buy up to 99 percent of a bank's shares, the Jakarta Stock Exchange (JSX) announced on Friday.

The JSX said the move, which became effective on Friday, followed the government's recent decision to raise the limit on foreign ownership of the country's banks.

According to a recently issued government regulation, which supplements Banking Law No. 10/1998, the maximum amount of bank shares which can be listed on the stock exchange is 99 percent.

The remaining 1 percent, which must be owned by Indonesian citizens or local companies, should not be listed. However, foreigners, individuals or institutions are allowed to buy 100 percent of listed shares, according to the new regulation.

The JSX said it allowed foreigners to buy up to 99 percent of a bank's shares because most of the banks traded on the stock exchange had a company listing or 100 percent listing.

There were 21 domestic banks traded on the JSX as of May 20 and only two of them were partially listed.

Foreigners previously were allowed to buy only 49 percent of a bank's listed shares. (udi)