Foreign issuers will be allowed here next year<\/p>\n
JAKARTA (JP): Foreign companies will be allowed to float
\nshares on Indonesian stock exchanges next year, Felia Salim, a
\ndirector of the Jakarta Stock Exchange (JSX), said yesterday.<\/p>\n
Felia told journalists during a break in a seminar on the new
\nstock market law at the Borobudur Inter-Continental hotel that
\nthe JSX is currently drafting the ruling on listing procedures
\nfor foreign companies.<\/p>\n
\"However, the draft still needs the consent of the Stock
\nMarket Supervisory Agency (Bapepam) before it comes into affect,\"
\nFelia said.<\/p>\n
As an international-level stock exchange, Felia said, the JSX
\nshould follow the global trend of equity movement.<\/p>\n
She said that neighboring stock exchanges, such as the Kuala
\nLumpur Stock Exchange and the Thailand Stock Exchange, have moved
\ntoward allowing the listing of foreign firms on their markets.<\/p>\n
\"It will benefit both local and foreign investors if foreign
\ncompanies are allowed to list their shares here. They will have
\nmore choices to buy the best shares,\" Felia said.<\/p>\n
Concurring with Felia, economist Christianto Wibisono said
\nthat by allowing foreign companies to enter local markets, the
\nstock market law will help create more competition among share
\nissuers on local markets.<\/p>\n
\"I fully agree with the entrance of foreign companies into
\nlocal markets because it could stop the arrogance of local share
\nissuers,\" said Christianto, who is also chairman of the
\nIndonesian Business Data Center.<\/p>\n
Law<\/p>\n
According to the explanatory notes on point 15 of article 1 of
\nthe new stock market law, both local and foreign companies can
\nconduct public offerings of their shares on local stock markets.<\/p>\n
The law was endorsed by the House of Representatives early
\nlast week and is expected to come into effect early next year.<\/p>\n
While applauding the passing of the new law by the House, JSX
\npresident Hasan Zein Mahmud criticized certain articles of the
\nlaw, which, he said, may cause \"set backs\" in the country's
\nfuture stock markets.<\/p>\n
He said that the law gives Bapepam excessive control over
\nlocal stock exchanges. It provides for Bapepam to be involvement
\nin the election of members of the exchanges' boards of management
\nand commissioners and in the preparation of the exchanges' annual
\nbudget.<\/p>\n
\"According to the rule of thumb, the management of the JSX is
\nresponsible to Bapepam in relation to its public services, while,
\nin relation to financial responsibilities, the management should
\nbe responsible to shareholders,\" Hasan said.<\/p>\n
Point 3 of article 5 of the law stipulates that the stock
\nexchanges' annual budget and the use of its profits have to
\nfollow Bapepam's guidelines and have to be reported to the
\nagency.<\/p>\n
Another \"set back\" in the law is that its gives
\nresponsibilities to local stock exchanges in managing stock
\ntransactions, trading settlements and ensuring efficient flows of
\ndeals but does not give them the necessary rights to control
\nprofessions and institutions involved in those activities, Hasan
\nsaid.<\/p>\n
\"Instead, the law extends all the necessary controlling rights
\nto Bapepam,\" Hasan said. \"Thus, Bapepam turns out to be the most
\npowerful institution in the capital market.\"<\/p>\n
A similar criticism of the \"powerful\" Bapepam was voiced by
\nlawyer Todung Mulya Lubis and economist Rizal Ramli.<\/p>\n
Mulya said at an earlier stock exchange law seminar on
\nWednesday that the law gives excessive power to Bapepam, without
\nconferring full independence on the body.<\/p>\n
Supporting Mulya's argument, Rizal, who is chairman of the
\nEconit economic research group, said Bapepam needs a strong group
\nof professionals with good salaries to exercise the agency's
\ncontrol over stock market-related institutions and professions.<\/p>\n
\"If not, I'm afraid, a number of Bapepam's officials will
\nmisuse their power for personal gain,\" Rizal said. (rid)<\/p>",
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