Market Observer Warns of Market Absorption Readiness as Free Float Requirement Increases

Tue, 24 Feb 2026, 20:39 WIB | Source: ANTARA_ID | Regulation

Jakarta (ANTARA) – Indonesian Capital Market Observer Reydi Octa has warned that it is important to ensure market readiness when the minimum free float requirement is increased from the current 7.5 per cent to 15 per cent.

“Releasing shares to the public requires careful timing and a gradual approach, ensuring market readiness. If not done carefully, it could put downward pressure on prices,” Reydi said when contacted by ANTARA in Jakarta on Tuesday.

In addition, he also warned of the risk of oversupply, which could temporarily depress share prices, when the minimum free float of 15 per cent begins to be implemented.

“In theory, a larger free float increases liquidity and makes prices more efficient because supply and demand are healthier. But in the initial phase, there is a risk of oversupply that could temporarily depress prices,” said Reydi.

Reydi believes that the main challenge of the plan lies in the current structure of share ownership, which is already highly concentrated, especially in certain large-cap stocks.

Regarding investor response, he believes that if the policy is implemented, institutional investors will tend to respond positively because it will increase transparency and the quality of the Indonesian stock market.

“Meanwhile, retail investors may be more selective, especially if there are special notations or short-term price pressures,” said Reydi.

For listed companies, he believes that companies that are compliant and have strong fundamentals will actually benefit because they will be more easily included in global indices and attract foreign investors.

“Companies with a concentrated ownership structure will have to adapt,” said Reydi.

PT Bursa Efek Indonesia (BEI) has estimated that the market needs to absorb around Rp187 trillion in liquidity in order for 267 listed companies to increase their free float from the current 7.5 per cent to 15 per cent.

In the initial phase, BEI will prioritise the implementation of the minimum free float requirement of 15 per cent for 49 large-cap companies.

BEI has made adjustments to Regulation No. I-A concerning the Listing of Shares and Equity Securities Other Than Shares Issued by Listed Companies.

One of the regulatory adjustments that will be made by BEI includes market deepening, with the drafting of new policies that increase the minimum free float limit for listed companies to 15 per cent, and the implementation is targeted for March 2026.

In line with this, the OJK is preparing a plan to provide special notations for listed companies that cannot meet the minimum free float requirement of 15 per cent.

Acting Chairman of the OJK Board of Commissioners, Friderica Widyasari Dewi, or Kiki, explained that the provision of special notations is only as a marker, and does not mean that the listed company will be moved to a separate board, thus making it easier for investors to choose shares, with the aim of protecting investors.

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