IDX Enhances High Shareholding Concentration Screening with New Price Impact Ratio
The term High Shareholding Concentration (HSC) has become a frequent topic in Indonesia’s capital market in recent months. The Indonesia Stock Exchange (BEI) has refined its method for determining HSC by adding a new indicator called the Price Impact Ratio (PIR). This step, highlighted by MSCI and S&P, is part of capital market reforms aimed at improving transparency and trading quality.
High Shareholding Concentration (HSC) is a condition where a company’s share ownership is concentrated among a small number of investors or shareholders. Even if a company has millions of shares, the majority are controlled by a few parties, limiting the number of shares actually circulating in the market, known as free float. For example, a company with 100 billion shares might have 88% held by controlling shareholders and only 12% available to the public. The fewer shares available for trading, the more sensitive the share price becomes to transactions.
Shares with high ownership concentration typically exhibit several characteristics: greater price sensitivity, lower liquidity, wider bid-ask spreads, higher potential volatility, and increased vulnerability to price manipulation if not properly supervised. It is important to note that HSC status does not indicate a poor-quality stock or a rule violation. It simply signals that the ownership structure is more concentrated than usual, and investors should understand the associated liquidity risks.
Free float refers to the number of shares genuinely available for public trading. Shares held by controlling shareholders, the government, directors, commissioners, or strategic investors are not considered free float as they are not actively traded daily. A smaller free float generally makes a share price more susceptible to movement. While novice investors might view this positively, from a market perspective, it poses a risk because the price may not reflect the company’s fair value. Ideally, share prices are formed by a broad base of buyers and sellers. When only a few shares are traded, prices can shift drastically due to transactions by just a few parties, potentially disconnecting the price from the company’s fundamental condition.
As of 15 July 2026, the BEI expanded its list of shares with High Shareholding Concentration to 51 stocks, a significant increase from the 10 stocks listed on 3 April 2026. This information is available on the official IDX website. Notably, PT Lima Dua Lima Tiga Tbk. (LUCY) was previously on the HSC list but had its status revoked by the BEI on 29 June 2026.
Starting in 2026, the BEI introduced the Price Impact Ratio (PIR) as a new screening tool for identifying potential HSC stocks, particularly those with a market capitalisation above IDR 10 trillion. The PIR measures the extent of share price changes relative to trading activity. A stock that experiences significant price increases or decreases despite low transaction volumes will have a high PIR, indicating a potentially high ownership concentration. The ratio is calculated by examining the relationship between price changes and velocity, which is the ratio of average transaction volume to free float shares. A high PIR triggers further examination by the exchange. For instance, a stock with a small transaction volume that causes a large price jump would have a higher PIR than a stock with a large transaction volume and a small price change, even if the latter’s total traded value is much greater.