IDX: Transparency on highly concentrated shares to boost Indonesia's weight

Jakarta (ANTARA) - PT Indonesia Stock Exchange (IDX) has been disclosing stocks suspected of having high shareholder concentration since 2 April 2024. Acting CEO of IDX Jeffrey Hendrik believes that this disclosure will, in the long term, encourage an increase in the weighting of Indonesian stocks in the eyes of global index providers, such as Morgan Stanley Capital International (MSCI) and Financial Times Stock Exchange (FTSE). “With better transparency, a deeper market, and far better governance going forward, we are also confident that in the long term Indonesia’s weighting will be much higher than it is now,” said Jeffrey in an interview at the IDX building in Jakarta on Monday. However, he did not deny that in the short term, this disclosure will cause volatility and selling pressure, mainly from foreign investors (net sell), in the Indonesian stock market. Jeffrey explained the reason for not disclosing the high shareholding concentration transparency in detail to the public, which is to maintain IDX’s objectivity as a regulator. According to him, if the entire high shareholding concentration methodology is disclosed to the public, it will certainly lead to efforts by certain parties to adjust conditions to that methodology. “Of course, we do not want that; we want all of this to be based on fair market mechanisms, orderly market mechanisms, so that all actions are certainly carried out with a methodology that we can be accountable for,” said Jeffrey.