Indonesia committed to measures to boost stock market transparency, minister says

JAKARTA, Jan 30 : Indonesia is committed to introducing necessary reforms in the operation of its stock market, the country's chief economic minister Airlangga Hartarto reiterated on Friday, after global agency concerns about transparency triggered an $80 billion market rout.

"In response to this situation, the government emphasised its commitment to maintaining the stability and credibility of the nation - and this is also for the credibility of the capital market - through several strategic steps," Airlangga told journalists outside the office of sovereign wealth fund Danantara Indonesia. 

He said the steps include an increased focus on plans to demutualise the IDX, which was already in the works before the rout, as well as doubling the free float of stocks to 15 per cent, as announced by the country's financial regulator a day earlier. 

He added that pension funds and insurance firms would be allowed to increase their exposure to the capital market to 20 per cent of their available capital, up from 8 per cent. Reuters reported last year that the country's $48 billion state pension fund was looking to up their market footprint. 

Speaking alongside Airlangga, Danantara chief Rosan Roeslani said the sovereign wealth fund's investment in the market, as mentioned on Thursday, would be subject to demutualisation. 

The rout, which erased about $80 billion in market value, came after index provider MSCI flagged concerns about ownership and trading transparency in Indonesian stocks, the latest setback for a market struggling to maintain investor confidence.