Barito Renewables Reaches Two-Year Low Amid Shareholding Uncertainty

Indonesia Stock Exchange Flags Companies for High Shareholder Concentration

Shares of PT Barito Renewables Energy plummeted on Monday to their lowest level in over two years after the Indonesian stock exchange flagged the company for having a highly concentrated shareholder base. The company, backed by billionaire Prajogo Pangestu, dropped as much as 14% to its lowest level since mid-January 2024 as trading resumed after a Friday holiday.

The Indonesia Stock Exchange identified a number of listed firms with more than 95% of shares held by a small group of investors as part of reforms aimed at meeting MSCI Inc.'s standards on ownership transparency. Other companies identified include PT Dian Swastatika Sentosa, which fell 14%, and PT Samator Indo Gas and PT Abadi Lestari Indonesia, both of which dropped 15%.

Regulators are fast-tracking the changes ahead of a May deadline to avoid a potential downgrade to frontier market status by MSCI that could spur foreign outflows. As of June 2025, the 20 largest tycoon-linked companies on the Jakarta Composite Index account for nearly 43% of the index's weighting, according to PT Trimegah Sekuritas Indonesia data.

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The push for greater disclosure mirrors Hong Kong's 2016 move to publish shareholder concentration data, IDX's President Director Jeffrey Hendrik said at a briefing on Thursday. Indonesia's stock market has long been dominated by family-owned conglomerates that operate dozens of listed and private entities spanning industries from mining to petrochemicals.

There's a possibility that both PT Barito Renewables Energy and PT Dian Swastatika Sentosa might be excluded from the MSCI Indonesia Index, similar to what happened in Hong Kong when the local authority took similar steps, said Wilbert Arifin, an equity analyst at PT Mirae Asset Sekuritas Indonesia. That may prompt active investors to sell ahead of potential passive fund outflows if the exclusions materialize, he added.

The reforms significantly lower the risk of a frontier market downgrade, Arifin said. The policy "signals constructive regulatory engagement and is likely a modest net positive for market sentiment." While increased transparency may reduce Indonesia's MSCI Emerging Market weight and trigger about $1 billion in passive outflows, the reforms are a step towards greater transparency and accountability.

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