Managing stock exchange<\/p>\n
Different from the shareholders meetings of most publicly-
\nlisted companies which usually run for two hours at the longest
\nwith pre-determined conclusions, the one held by the shareholders
\nof the Jakarta Stock Exchange Inc. on Tuesday dragged on for 16
\nhours into Wednesday morning.<\/p>\n
But the lengthy meeting was expected for two main reasons.<\/p>\n
The first reason is quite obvious. The equity of the company
\nwhich manages the Jakarta stock exchange (JSX) is shared equally
\nby around 200 institutional shareholders. This is strikingly
\ndifferent from the companies listed on the JSX, in which the
\nfounders remain the majority owners who can dictate their wishes
\nat the shareholders meetings.<\/p>\n
The second and more important reason is the increasingly
\nimportant role of the JSX in the country's economy. The market
\ncapitalization of the exchange has reached almost US$50 billion
\nor one third of the gross domestic product. No wonder, the
\nshareholders, greatly concerned about the future of the exchange,
\nhave been quite assertive regarding such matters as how the JSX
\nshould be managed and who will be responsible for the management.<\/p>\n
Disregarding the length of the meeting, we think the depth and
\nbreadth of the discourses between the management and the
\nshareholders should be a good example of how a corporate
\nshareholders meeting should proceed. The shareholders even have
\nthe final say about the compensation for the directors and the
\nmajor items on the spending plans.<\/p>\n
The quality of management is crucial for ensuring a steady,
\nsound growth for the JSX amid the fierce competition to attract
\nnew listings with stock exchanges in other countries. Though law
\nenforcement for listed companies is the responsibility of the
\nCapital Market Supervisory Agency of the finance ministry, the
\nJSX management has a vital role in ensuring an efficient exchange
\nthat guarantees fair, transparent transactions.<\/p>\n
The JSX is also about to mark a new milestone in its
\noperations with the scheduled introduction next month of a
\ncomputerized trading system in its new headquarters. The Jakarta
\nAutomated Trading System (JATS) is another step by the JSX toward
\nbecoming an international exchange.<\/p>\n
JATS will surely contribute to improving the efficiency and
\nliquidity of the exchange as the new system will speed up the
\nprocessing, clearing and settlement of transactions. The
\nautomation will facilitate a speedier flow of information that is
\ncrucial for an exchange operation and will increase the
\ncredibility and accessibility of the exchange.<\/p>\n
The automation also will help support the campaign of the JSX
\nmanagement toward developing a broader base among the domestic
\ninvesting public because transactions can be done not only from
\nthe local terminals at the exchange and remote trading terminals
\nat the brokers' offices in Jakarta, but also from remote trading
\ngalleries in other cities, such as Medan and Semarang.<\/p>\n
At present, more than 70 percent of the transactions at the
\nJSX are done by foreign investors. That is not conducive for
\nsound growth because the exchange is highly vulnerable to wild
\nfluctuations. Jittery foreign portfolio investors could suddenly
\nwithdraw at the slightest rumors as can be seen from the recent
\nfallout from Mexico's financial crisis on many emerging markets.<\/p>\n
Both international and domestic analysts agree that the
\npotential growth of the JSX is enormous. But this potential can
\nbe realized only if the exchange is operated and managed
\nefficiently to allow for fair and transparent transactions.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/managing-stock-exchange-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}