JSX market cap down 72% this year<\/p>\n
JAKARTA (JP): The Jakarta Stock Exchange (JSX) lost 72.5
\npercent of its market capitalization this year dropping to Rp
\n261.9 trillion (US$27.56 billion) from Rp 451.8 trillion at the
\nend of 1999 as share prices tumbled amid a sluggish market.<\/p>\n
JSX Composite Index as of Dec. 14, closed at 419.19, less than
\n60 percent of the level of 703.48 recorded at the start of
\ntrading in January last year, according to the exchange's end of
\nyear report issued on Friday.<\/p>\n
Average transaction volumes this year also dropped to 570.3
\nmillion shares from 722.6 million shares in 1999. In the same
\nperiod, the average transaction value fell to Rp 521.8 billion
\nfrom Rp 598.7 billion last year.<\/p>\n
However, funds raised through initial public offering grew by
\n88 percent to Rp 2.14 trillion. The number of new listings also
\nincreased to 21 companies as compared to only nine companies last
\nyear.<\/p>\n
Among the biggest newcomers was PT Bank Central Asia (BCA),
\nthe first company under the Indonesian Bank Restructuring Agency
\n(IBRA) that floated its shares on the local stock market.<\/p>\n
BCA offered 662.24 million shares at a price of Rp 1,400 a
\nshare, or 22.5 percent of its total equity in its initial public
\noffering in June.<\/p>\n
The total value of shares floated on the JSX during this year
\nreached a total of Rp 8.39 trillion, far high than the Rp 971
\nbillion made in 1999.<\/p>\n
On companies' business performance, the JSX reported that 207
\ncompanies had recorded net profits as of Dec. 14, growing by 10
\npercent compared to the same period last year.<\/p>\n
Another positive indicator was a surge in cash dividend
\npayments in which 125 companies were able to afford to pay
\ndividend this year as compared to only 55 companies last year.<\/p>\n
The JSX noted a greater awareness for prudential management
\namong publicly-owned companies, with only 11 being forced to be
\ndelisted from the stock market, compared to 20 companies last
\nyear.<\/p>\n
Furthermore, local investors' share of the total market
\ntransactions rose to 80 percent this year compared to 65 percent.<\/p>\n
Foreign investors made up only 20 percent of transactions in
\nthe capital market this year.<\/p>\n
JSX president Mas Achmad Daniri attributed a higher awareness
\namong Indonesians on the benefit of investing in the stock
\nmarket.<\/p>\n
But foreign investors have blamed JSX's small market
\ncapitalization behind their reluctance to invest in the
\nIndonesian stock market.<\/p>\n
Chairman of the New-York based investment firm Tocqueville
\nAsset Management L.P. Franscois Sicart has said that the sharp
\ndepreciation of the rupiah against the dollar had sharply diluted
\nthe JSX's market size in foreign currencies.<\/p>\n
Furthermore, only a small portion of the JSX's market value
\nwas actually available for the public, as a large portion was
\nstill controlled by founders of the companies and the government.<\/p>\n
Daniri suggested that the government should divest its stakes
\nin state owned enterprises through the stock market, to encourage
\nforeign investors' confidence. (bkm)<\/p>",
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"sponsor": "Okusi Associates",
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