OJK Allows Share Buybacks Without Shareholders’ Meeting, Market Response Muted

JAKARTA, investortrust.id – Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan, OJK) has implemented a policy allowing publicly listed companies to conduct share buybacks without requiring a shareholders’ meeting. The policy, effective for six months starting March 18, 2025, aims to provide market stability amid high volatility. However, the Indonesian stock market, as reflected in the Jakarta Composite Index (IHSG), responded flatly.

“Publicly listed companies may conduct share buybacks without a shareholders’ meeting in accordance with the provisions. This implementation aligns with OJK Regulation No. 29 of 2023 on Share Buybacks by Public Companies,” said Inarno Djajadi, Chief Executive of Capital Market Supervision, Derivatives Finance, and Carbon Exchange at OJK, during a press conference at the Indonesia Stock Exchange (BEI) building on Wednesday, March 19, 2025.

Market Stability Amid Volatility

Inarno explained that this policy was introduced in response to significant market fluctuations. OJK expects the relaxation of buyback requirements to serve as a positive signal, reinforcing confidence in companies' strong fundamentals and mitigating downward pressure on stock prices.

Share buybacks without a shareholders’ meeting have been a recurring policy tool used by OJK to stabilize stock prices in highly volatile conditions. Similar measures were implemented in 2013, 2015, and 2020, each time successfully boosting investor confidence in Indonesia’s capital market.

“We understand that the market is currently facing significant challenges, but we are confident in navigating these conditions. OJK will conduct periodic evaluations and ensure that all policies are implemented effectively,” Inarno added.

Market Reaction Remains Tepid

Despite OJK’s efforts, the policy’s immediate impact on the stock market was muted. As of 10:31 AM Jakarta time, the IHSG showed a modest gain of 13 points (0.23%) to reach 6,237 following the press conference. This was a significant drop from the 60-point surge observed before the announcement.

OJK stated that it will continue monitoring the policy’s implementation and collaborate with stakeholders to minimize selling pressure in the market.