Businessmen see bright future for local stock market<\/p>\n
JAKARTA (JP): The Indonesian capital market is in for a bright
\nfuture due to the government's commitment to realigning the
\nmarket's rules and management, foreign business leaders say.<\/p>\n
\"As representatives of the foreign investors in the country,
\nwe welcome very much the Indonesian government's efforts to
\nintroduce a new ruling on the capital market, which I believe
\nwill encourage many more foreign investors to come to Indonesia,\"
\nTan Soo Nan, executive vice president of the Development Bank of
\nSingapore told The Jakarta Post here yesterday.<\/p>\n
\"I should honestly say that Indonesia has tremendous potential
\nto develop its capital market and even will probably become a
\nleading market in the Asian region, thanks to the stability of
\nits economy and politics,\" he said.<\/p>\n
Indonesia will likely post a significant growth in gross
\ndomestic product (GDP) of seven percent this year, compared to
\n6.5 percent last year and 6.3 percent in 1992, Tan noted, saying
\nthis kind of growth is a key economic indicator.<\/p>\n
Tino Tratschin, vice president of the Union Bank of
\nSwitzerland, concurred that Indonesia, one of the leading
\neconomies in the region, is now increasingly aware of the key
\nrole of the capital market.<\/p>\n
Tratschin and Nan were among the participants in the two-day
\nEuromoney conference on the capital market opened at Shangri-La
\nHotel yesterday.<\/p>\n
The conference, which was opened by Secretary General of the
\nMinistry of Finance Jusuf Anwar was jointly sponsored by Bank
\nNiaga\/Niaga Securities, Lippo Securities, Morgan Stanley Asia,
\nUnion Bank of Switzerland, Gadjah Tunggal DBS Securities\/DBSBank
\nand PT Semen Cibinong.<\/p>\n
Meanwhile, Charles L. De Queljoe, president of Lippo
\nSecurities affiliated with the diversified business conglomerate,
\nLippo Group, said that the Jakarta stock exchange has grown
\nrobustly, demonstrated by its high capitalization and the number
\nof listed companies.<\/p>\n
He noted that the trading volume on the JSX , for instance,
\nreached Rp 19.28 trillion last year, up from Rp 7.93 trillion a
\nyear earlier and only Rp 5.78 trillion in 1991.<\/p>\n
Expectations<\/p>\n
Queljoe, while praising the new legislation to strengthen the
\npowers of the Capital Market Supervisory Agency (Bapepam),
\nhowever also asked for clarifications about the capital gains
\ntax.<\/p>\n
\"As you know, in some countries such as Singapore and Thailand
\nthere is no capital gains tax on securities transactions,\" he
\nsaid.<\/p>\n
Queljoe expressed concern that the capital gains tax might be
\none of the causes for the recent drop in domestic investment on
\nthe exchange.<\/p>\n
He estimated that domestic investors account for only between
\n10 to 15 percent of the transactions on the stock markets.<\/p>\n
\"I think, the capital gains tax has been further discouraging
\ndomestic investors from the capital market,\" he pointed out.<\/p>\n
But the foreign investors have some advantages because they do
\nnot have to pay capital gains tax on profits that they make at
\nthe JSX, he argued.<\/p>\n
He also expressed concern about the restrictions imposed on
\npension funds.<\/p>\n
\"Only about 10 percent of the total pension funds are invested
\nin the stock market,\" he added.<\/p>\n
He noted that the Indonesian capital market's capitalization
\nlast year reached only $34 billion compared to $150 billion in
\nThailand and $230 billion in Malaysia.<\/p>\n
Stock market capitalization accounted for only 23 percent of
\nIndonesia's GDP.<\/p>\n
Commitments<\/p>\n
Minister Mar'ie Muhammad noted in a written speech to the
\nconference that the government is now on the right way to develop
\nthe country's capital market.<\/p>\n
\"Today we see a nation characterized by low inflation, a
\ngrowing agricultural surplus, a dynamic manufacturing sector, and
\nrapid export growth,\" he said.<\/p>\n
\"One of the main functions given to Bapepam, for example, is
\nto be a vehicle through which foreign investment can be
\neffectively channeled to help meet the significant levels of
\nfinancing required to achieve our growth targets,\" he added.<\/p>\n
In addition, the board should provide small- and medium-sized
\ncompanies with easy access to a viable alternative source of
\ncapital.<\/p>\n
He concluded that the government is fully committed to putting
\nin place a permanent legal and regulatory framework that is
\nconsistent with international standards and practices. (fhp)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/businessmen-see-bright-future-for-local-stock-market-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}