JSX, SSE and OTC defend separate operations<\/p>\n
JAKARTA (JP): Executives of the country's three stock
\nexchanges yesterday defended their plan to continue operating
\nseparately despite growing demand for their unification.<\/p>\n
Basiruddin A. Sarida, the president of the Surabaya Stock
\nExchange (JSE) said the unification of the three bourses will be
\ncounterproductive because it will not only violate government
\npolicy but will also discourage a competition spirit.<\/p>\n
"The unification of the three stock bourses is against the
\ngovernment's long-term policy of developing the country's capital
\nmarket," he said in a panel discussion held by the Association of
\nIndonesian Journalists (PWI).<\/p>\n
Speakers at the discussion, which was officially opened by
\nChairman of the Capital Market Supervisory Agency (Bapepam)
\nBacelius Ruru, included Tito Sulistio, the president of the Over-
\nthe-Counter (BPI) stock exchange, and Felia Salim, the director
\nfor research and development of the Jakarta Stock Exchange (JSX).<\/p>\n
Basiruddin said that operating more than one stock exchange
\nwill offer advantages to both investors and share issuers.<\/p>\n
"With the operation of more than one stock market, both shares
\nissuers and investors will have more alternatives," he said.
\n"Investors will have the opportunity to choose whichever stock
\nexchange offers higher returns, while share issuers take the
\nmarket with lower listing fees."<\/p>\n
Merger<\/p>\n
Business analysts have called on the government to merge the
\nJSX, JSE and the OTC into a single stock exchange in a bid to
\nreduce operational costs.<\/p>\n
The operation of the SSE is considered not so effective
\nbecause over 80 percent of its members are also listed on the JSX
\nand also due to the fact that most of its trading activities take
\nplace in its Jakarta branch. The least developed OTC has been
\nalso asked to join the integration as most companies, even small-
\nscale ones, still prefer to list their shares on the JSX.<\/p>\n
The OTC market was established in 1987 but its trading
\nactivities remain dormant. The number of companies listed there
\ntotals only 18 at present, consisting of 13 bond issuers and five
\nshare issuers. Its trading volume is also quite small, totaling
\n4.17 million shares worth around Rp 10.2 billion (US$4.85
\nmillion) in the whole 1993, as compared to 3.84 billion shares
\nworth Rp 19.03 trillion (US$9.06 billion) on the JSX in the same
\nperiod.<\/p>\n
Tito, the OTC market's president, said that unifying the three
\nbourses will not solve the inefficiency problem or the
\nunpopularity of the market.<\/p>\n
He said that the poor performance of the OTC market results
\nfrom an unclear policy about the mission of each market.<\/p>\n
"It seems that the three markets are competing with each other
\ndue to the unclear guidance of their operations. What we really
\nwant is for them to complement each other," he said.<\/p>\n
He suggested that the government issue a clear-cut policy to
\nallow the three stock exchanges to operate for different market
\nsegments.<\/p>\n
Tito said the OTC, for example, could be allowed only to
\nreceive small companies, the SSE to be responsible for medium-
\nsized firms and the JSX for large ones.(hen)<\/p>",
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"sponsor": "Okusi Associates",
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