Shares of PT Barito Renewables Energy have experienced a dramatic downturn, plunging by the maximum daily limit for consecutive days, following FTSE Russell’s announcement of the company’s exclusion from its indices. This announcement has amplified concerns among investors, leading to a staggering two-day loss of nearly 36%.
On Monday, the stock fell by 20%, a steep decline attributed to FTSE Russell’s decision to remove Barito from its listings just a day after its inclusion. The index compiler cited “high shareholder concentration” as a significant factor for this unusual move. This development is just the latest chapter in the tumultuous journey of Barito’s shares, which have seen extreme fluctuations since the company’s IPO late last year.
Compounding the issue, FTSE Russell had previously delayed Barito’s inclusion in its indices due to concerns about the company’s status on the Indonesian stock exchange’s watchlist for volatile entities. Barito disclosed in a recent statement that, during its IPO, it had fully complied with shareholding transparency requirements. As of September 19, four shareholders collectively owned around 96% of the company, a figure slightly below the 97% disclosed in its IPO prospectus. This revelation raised alarms about the company’s compliance with free float regulations, which are crucial for maintaining a healthy trading environment.
Barito’s recent struggles have had broader implications for Indonesia’s stock market, where the company’s dramatic decline has exerted pressure on the national stock benchmark, which dipped by up to 0.9% before recovering. Industry experts, including Mohit Mirpuri, a fund manager at SGMC Capital in Singapore, noted that the interconnectedness of Barito with other companies in Indonesia amplifies the market’s vulnerability. A significant drop in Barito’s value can create a ripple effect, affecting overall market sentiment.
As investors keep a close eye on Barito’s next moves, the company has pledged to adhere to the stock exchange’s requirements regarding shareholder distribution. This commitment aims to restore investor confidence and stabilize the company’s uncertain future. The unfolding situation serves as a reminder of the volatile nature of stock exchanges, particularly for companies navigating strict regulatory frameworks while attempting to attract investor interest.
The stock market can be unpredictable, and PT Barito Renewables Energy’s current circumstances emphasize the importance of prudent investment strategies and vigilant market monitoring. As developments continue, both investors and analysts are likely to remain on high alert, eager to grasp the next twist in this gripping financial saga.