JSX needs transparency, law enforcement: TSE<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
The Indonesian stock market needs to boost transparency and
\nlaw enforcement in a bid to entice more investors and encourage
\nmore firms to list their shares on the bourse, a visiting top
\nofficial of the Tokyo Stock Exchange (TSE) said.<\/p>\n
Seiji Adachi, the chief strategist for Asian business and
\ncorporate planning at the TSE, said the Jakarta Stock Exchange
\n(JSX) and the capital market regulator should advocate companies
\nuphold transparency in order to gain foreign investors' trust.<\/p>\n
\"Transparency is the key now to expanding the (JSX) investor-
\nbase. Investors, especially those from overseas, don't want to
\ninvest in a market that is not transparent,\" Adachi said at a
\nseminar on capital markets on Thursday.<\/p>\n
He said the Indonesian Capital Market Supervisory Agency
\n(Bapepam) should remove most of its regulations on corporate
\ndisclosure requirements and on the structure of the stock market
\nin order to become a more user-driven market.<\/p>\n
The government should speed up efforts to \"demutualize\" the
\nJSX in order to instill a swift decision-making process at the
\nbourse, revitalize each internal division of the bourse and
\nimprove communications with investors and listed companies, he
\nsaid.<\/p>\n
Demutualization is an attempt to transfer the control of the
\nJSX to individuals or institutions that have no direct relation
\nwith the activity in the bourse. Currently, securities firms,
\nwhich are also members of the bourse, own the JSX.<\/p>\n
The management and commissioner of the JSX are also appointed
\nfrom the membership of securities firms, making the bourse prone
\nto conflicts of interest and these firms have a strong influence
\non market management and policy development.<\/p>\n
The House of Representatives are presently deliberating a
\ndraft law on capital markets, which will pave the way for the
\ndemutualization of the JSX.<\/p>\n
Adachi also highlighted the importance for the JSX and Bapepam
\nto boost law enforcement in the markets.<\/p>\n
\"The Jakarta stock market has sufficient regulations already,
\nbut the point is how to enforce them. Such efforts should be
\nsupported by acts of government,\" Adachi said.<\/p>\n
Critics have said Bapepam, which should be at the forefront of
\npolicing capital markets, has often ignored capital market rules
\nand the principles of good governance.<\/p>\n
This lack of law enforcement has meant few capital market
\nviolations have been brought to court and the watchdog has often
\ntaken the side of badly behaved companies when dealing with
\ncontroversial cases.<\/p>\n
Elsewhere, the JSX and the TSE signed a memorandum of
\nunderstanding on Thursday to foster the securities markets in
\nboth Japan and Indonesia, and to help the further development of
\ncapital markets in the Asian region.<\/p>\n
Under the agreement, the bourses will consult and cooperate on
\nissues of mutual interest in order to strengthen the markets.
\nThey have also agreed to exchange beneficial information to
\nmaintain the efficiency and integrity of the markets.<\/p>\n
Box
\nMarket size of Asian bourses
\n (at the end of 2003)<\/p>\n
Stock Market Trading Listed
\nexchange capitalization value companies<\/p>\n
(in million US$)<\/p>\n
Domestic Foreign<\/p>\n
Tokyo 2,953,098.3 2,108,732.1 2,174 32
\nOsaka 1,951,518.7 112,522.0 1,140 0
\nHong Kong 714,597.4 296,155.9 1,027 10
\nAustralia 585,431.0 371,970.4 1,405 66
\nTaiwan 379,060.4 591,717.6 669 5
\nShanghai 360,106.3 255,964.7 780 0
\nSouth Korea 298,248.1 459,035.1 684 0
\nKuala Lumpur 160,970.3 52,233.4 898 4
\nShenzen 152,872.4 140,287.3 505 0
\nSingapore 148,502.6 91,928.2 475 76
\nThailand 119,017.2 102,420.8 418 0
\nJakarta 54,659.1 14,652.4 333 0
\nNew Zealand 33,049.8 11,912.8 153 43
\nPhilippines 23,190.5 2,762.6 234 2<\/p>\n
Source: TSE<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/jsx-needs-transparency-law-enforcement-tse-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }