Jakarta. A total of 28 listed companies have pledged $696 million to buy back their shares, heeding a call from authorities to help them arrest a stock market decline amid an escalating Covid-19 pandemic. 

Top state-controlled banks Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI) have pledged Rp 3 trillion ($197 million) and Rp 1.8 trillion respectively to buy back their shares over the next few months, according to data compiled by Phillip Sekuritas Indonesia. 

At least 26 other companies have also announced a share buyback plan, pushing the total buyback value to Rp 10.6 trillion, the data showed.

Most of the companies said they would spread their stock purchase until June, except PP Presisi, a subsidiary of state-controlled constructor PP, which plans to do it until the end of July. 

Phillip Sekuritas said in a statement on Tuesday that BNI has already started buying back its shares a few days ago. 

BRI President Director Sunarso said the bank, the largest lender in Indonesia by asset, was ready to buy back shares at any time if deemed necessary. 

"BRI's liquidity and capital conditions are very adequate," he said.

"This corporate action will use the company's internal cash and will not affect BRI's financial condition. We currently have sufficient working capital and cash flow to finance all of the company's business activities," Sunarso said.

The lender was responding to the Financial Services Authority's (OJK) decision to relax the share buyback rule to relieve bearish pressure on the stock market.

Under the new rule, OJK allows issuers to buy back 10 to 20 percent of its shares from the market without approval from the general meeting of shareholders as long as it keeps the float – the number of shares owned by the public – at 7.5 percent.

Previously, a buyback without shareholder approval was only applicable when it did not exceed a 10 percent limit. 

The Jakarta Composite Index has already declined by 31 percent since the beginning of this year as investors grew more and more concerned about the Covid-19 pandemic's effect on the Indonesian economy.

The listed companies' combined valuation has slid to just 13.3 times of their earnings,

Indonesia has so far reported 172 confirmed Covid-19 cases with the outbreak showing no sign of a slowdown.

Add as a preferred source on Google +