Indonesian state firms to buy back more than US$700m worth of shares

[JAKARTA] Indonesia's state-owned enterprises will spend at least 10 trillion rupiah (S$1 billion) to buy back their shares starting from Tuesday, a cabinet minister said.

The Jakarta stock market fell 4 per cent on Monday, extending its slide from this year's high in April to 25 per cent at one point, technically falling into bear market territory defined as a 20 per cent decline or more from recent highs.

Indonesia's financial regulator issued regulations last week allowing listed firms to buy back shares to reduce "excessive market fluctuation". "We're planning to start the buy back tomorrow. We'll prepare the fund of at least 10 trillion rupiah," state-owned enterprise minister Rini Soemarno told reporters after a meeting at the presidential palace.

Soemarno declined to specify which firms will buy back their shares, but said it was "watching" 13 major state-owned companies.

A finance ministry official said earlier on Monday the government may also spend at least 3 trillion rupiah this year to buy back government bonds amid global market volatility and a weakening rupiah.

REUTERS