(Adds details, fund manager comments)
By Fathiyah Dahrul and Andjarsari Paramaditha
JAKARTA, Jan 23 Indonesia's stock exchange
required companies to make shares amounting to at least
7.5 percent of their paid-up capital available to the public, in
a bid to increase market liquidity and trading volumes.
The new rule, effective from Jan. 30, will give listed
companies two years to comply, the stock exchange said on
"The regulation should also be good for corporate governance
because a higher percentage of floating shares will attract more
attention from minority shareholders," said Jemmy Paul, head of
investment at Jakarta-based Sucorinvest Asset Management.
Companies that are likely to be affected include cigarette
maker Hanjaya Mandala Sampoerna and lender Bank CIMB
HM Sampoerna's main shareholder, New York-listed Philip
Morris International owns 98.2 percent, while CIMB Niaga
is 96.9 percent-owned by Malaysian-based CIMB Group,
companies said in exchange filings.
"Companies like BNGA or HMSP have to decide either on going
private, making a rights issue or making a share placement. I
think going private is the least preferred," Paul said.
The exchange is also raising the free-float requirements for
companies planning an initial public offering (IPO). The
following table shows the details :
Equity valuation Free-float size
less than 500 bln rupiah 20 percent
500 bln to 2 trln rupiah 15 percent
more than 2 trln rupiah 10 percent
Last month, Indonesia's stock exchange reduced trading sizes
to 100 shares per lot and increased the maximum volumes on
orders, effective Jan. 6.
The Jakarta Composite index has risen 5 percent so
far this year, making it the second-best performing market in
Southeast Asia after Vietnam.
(editing by Jane Baird)