Danantara CEO Rosan Roeslani revealed President Prabowo Subianto's ambitious goal to establish a global-standard stock exchange in Indonesia. In a recent meeting with the House of Representatives' Commission VI, Rosan emphasized the President's commitment to elevating the country's capital market to international benchmarks. This move aims to foster investor confidence, both domestically and internationally.
Rosan explained that President Prabowo actively engages in discussions about the stock exchange's progress and the government's strategies to strengthen the national capital market. The President's interest extends to the transparency of the Indonesian stock market, as assessed by Morgan Stanley Capital International (MSCI).
The CEO highlighted that the discussion with the President covered not only MSCI's transparency evaluation but also long-term plans to enhance the capital market. Rosan assured that their efforts are not solely in response to MSCI's assessment but also to improve the stock exchange's transparency and overall trustworthiness.
Transparency, Rosan emphasized, is a cornerstone of effective stock exchange management. It plays a pivotal role in attracting investor confidence and interest in the Indonesian stock market. Rosan stated that the implementation of high standards and transparency is crucial for fostering investor confidence in the capital market.
It's worth noting that MSCI had temporarily suspended rebalancing due to concerns about the transparency of Indonesia's share ownership structure. Despite some improvements in free float data, global investors remain wary of the ownership structure's transparency. This has raised questions about investment capacity and the potential for coordinated trading practices that could distort fair share prices.
In response, the Financial Services Authority (OJK) took proactive measures by organizing an online meeting with the Indonesia Stock Exchange (IDX) and MSCI. OJK's Hasan Fawzi revealed that the regulator, along with IDX and PT Kustodian Sentral Efek Indonesia (KSEI), proposed solutions to address MSCI's concerns. The plan involves three key commitments.
First, OJK is dedicated to enhancing the transparency of share ownership data, including ownership by shareholders above 1 percent, even those below the 5 percent threshold. Second, the regulator will expand investor classification, breaking it down into 27 subtypes, to improve the clarity and credibility of beneficial ownership disclosures. Third, the plan is to increase the free float or free vote threshold from 7.5 percent to 15 percent, with a gradual implementation involving all market players.
OJK also pledged to provide regular updates on the implementation of these commitments to the public, aiming to increase transparency with MSCI. Hasan added that further technical-level discussions will follow, with MSCI offering detailed insights into its assessment methodology and calculations for the Indonesian stock market.
