Indonesia's stock market regulators are planning a significant reform of free-float requirements in 2025, marking a new phase of structural change following a surge in the Jakarta Composite Index (IHSG) and evolving investor preferences.

Head of Capital Market, Derivatives, and Carbon Exchange Supervision at the Financial Services Authority (OJK), Inarno Djajadi, said while addressing the Capital Market Journalist Workshop on Saturday, November 15, 2025, that the IHSG had risen 18.57 percent to 8,394 between January 1 and November 7, setting 13 all-time highs, more than 10 of which occurred in the past two months alone.

Market capitalization jumped to Rp 15,316 trillion(US$915 billion), equal to 69.18 percent of national GDP surpassing the government’s 2025–2029 medium-term development plan (RPJMN) target of 68 percent and nearing OJK’s 2027 roadmap target of 70 percent.

“Just a little more. Hopefully we can reach 70 percent before the end of 2025,” Inarno said.

Indonesia Stock Exchange (IDX) President Director Iman Rachman said the recent rally reflects a major shift in market composition. Where Indonesia’s largest-cap companies were once dominated by big banks such as BCA, BRI, Mandiri, and BNI, today the leaderboard is increasingly filled by conglomerate-owned corporations.

“This marks a new investor pattern. Conglomerate-backed companies − many newly listed or recently restructured − have become the key drivers due to their economic scale and resilience against macroeconomic cycles,” Iman said.

Trading activity has also soared, with the average daily transaction value reaching Rp16.64 trillion, far above the 2025 target of Rp13.65 trillion. Daily active investors hit a record 228,000, surpassing the previous high of 180,000 during the pandemic era.

The number of registered domestic investors (SID) reached 19.1 million, up 4 million since the start of 2025. IDX projects the roadmap target of 20 million SIDs by 2027 will likely be achieved in 2026.

Foreign investors continued their net selling streak throughout 2025, recording Rp41.8 trillion in net outflows from January to September just Rp 7 trillion shy of the level seen during the first year of the pandemic.

Foreign ownership fell to 41.9 percent in September 2025, from 46.5 percent a year earlier. However, their share of daily trading remained stable at 38 percent, partly due to renewed foreign buying starting in August.

Free-float overhaul

As investor behavior evolves, OJK and IDX are preparing a major reform of free float rules, the percentage of shares available for public trading and a key determinant of liquidity.

Indonesia’s average free float currently stands at 23 percent, still below many regional markets. The minimum requirement today is 7.5 percent, a threshold considered insufficient for market depth.

Inarno said the authorities will raise the minimum requirement gradually. In the near or short term, it will be increased to 10 percent for new listings and upcoming IPO’s, then to 15 percent before increased to 25 percent in the long term.

“It’s impossible to jump straight to 25 percent. The consequences would be significant, so we need a phased approach,” he said.

IDX Corporate Valuation Director, I Gede Nyoman Yetna, said the new policy will shift the free-float calculation basis from equity value tied to historical price movements to market capitalization.

Simulations by IDX show companies currently required to free-float 10 percent of shares under the equity method would be required to release around 15 percent under the market-cap method.

Existing listed companies will also be pushed to maintain at least 15 percent free float for at least one year if they wish to move up to a higher board classification.

Additionally, IDX will continue encouraging “lighthouse companies” firms with market cap at above Rp3 trillion and free float of at least 15 percent (or Rp700 billion in public float value) to go public.