Indonesia Stock Exchange Revamps Watchlist Board Criteria, Shifts Focus to Fundamentals and Drops Price-Liquidity Rules
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The Indonesia Stock Exchange, or IDX, has announced an overhaul of the criteria for placing listed companies on its Watchlist Board, shifting the emphasis to a company's fundamentals rather than its share price or trading volume. IDX commissioner Iding Pardi said the new criteria take effect from September 28. Under the new rules, the exchange has scrapped requirements tied to share price levels, liquidity and tradable share volume, effective the same day as the removal of the previous minimum share price of 50 rupiah, or roughly 0.0028 US dollars. At the same time, a minimum free-float requirement of 15 percent is being phased in across the market. However, IDX will retain criteria based on financial performance and the legal status of companies, such as their ability to generate revenue, as well as bankruptcy filings or entry into debt restructuring proceedings. The Indonesian capital market is pressing ahead with reforms after global index providers raised concerns about market transparency earlier this year. MSCI is expected to announce the results of its review of Indonesia's stock market reforms in November, having previously extended its assessment period.