Parallel, Surabaya exchanges go ahead with merger plan<\/p>\n
JAKARTA (JP): PT Bursa Parallel Indonesia (BPI) and the
\nSurabaya Stock Exchange (SSE) are going ahead with their merger
\nplan despite their thorny relationship with the Jakarta Stock
\nExchange (JSX), executives said yesterday.<\/p>\n
\"Whatever the results of the negotiations with JSX, we are
\ngoing ahead with our merger plan and we are confident that the
\nnew market will be able to survive and grow,\" SSE's president,
\nBasjiruddin A. Sarida, said at a seminar on the prospect of
\nIndonesia's stock markets after the merger of BPI and SSE.<\/p>\n
Basjiruddin noted that the two bourses will conduct a joint
\nshareholders' meeting on June 24 to form the planned new stock
\nmarket and elect its board of directors.<\/p>\n
The planned market, to be headquartered in Surabaya, East
\nJava, will be set up with a paid-up capital of Rp 7.9 billion
\n(US$3.5 million), with each shareholder holding one share worth
\nRp 75 million.<\/p>\n
In yesterday's seminar, which was conducted by the Stock
\nMarket Supervisory Agency and the Jakarta chapter of the
\nAssociation of Indonesian Journalists, Basjiruddin was
\naccompanied by the president of BPI, Tito Sulistio, and president
\nof the JSX, Hasan Zein Mahmud. The seminar was opened by the
\nagency's chairman, Bacelius Ruru.<\/p>\n
Ruru noted that if the two parties -- JSX on one side and SSE
\nand BPI on the other side -- could not reach agreements on some
\nmatters, the government might intervene.<\/p>\n
The process of the merger has been slow because the two
\nparties have differed on the future relationship between the
\nplanned merged market and JSX.<\/p>\n
BPI and SSE want their relationship with JSX be a
\ncomplementary one, meaning that they will share their market --
\nthe merged exchange will serve small and medium-sized companies
\nand act as a bridge for those wanting to list on the JSX.<\/p>\n
Tito noted in his presentation that the two companies want the
\ncomplementary relationship with JSX because the merger is not
\nmerely aimed at unifying the two exchanges but also to redesign
\nIndonesia's capital market operations.<\/p>\n
Better service<\/p>\n
Yesterday, Hasan agreed with the two bourses' proposal on the
\ncomplementary relationship, saying that it would better serve the
\ncountry rather than making an open competition. JSX had initially
\nwanted its relationship with the merged market to be one of open
\ncompetition.<\/p>\n
\"We have no reason not to support the merger of BPI and SSE
\nbecause it will create more efficient capital market operations
\nin Indonesia. The problems are purely technical,\" Hasan said.<\/p>\n
According to Basjiruddin, the thorny issues JSX could not yet
\naccept include matters on single listing and cross trading, as
\nwell as on the split of incomes from listing fees.<\/p>\n
The single listing requirement would make JSX lose 98 of its
\nclients, which are categorized as small and medium enterprises,
\nwith a paid-up capital of less than Rp 25 billion.<\/p>\n
\"Although the financial losses might not be so great for JSX,
\nlosing 98 of its share issuers would damage its image as an
\ninternational-class stock exchange. So, I can understand it's
\ngoing to be difficult for JSX,\" Basjiruddin said.<\/p>\n
He suggested that the single listing principle be executed
\ngradually or applied for the new share issuers only because the
\n98 companies might not want to be forced out of the prestigious
\nJSX.<\/p>\n
JSX was formed by the government in the late 1970s, to
\nspearhead the country's stock market operations, and was
\nprivatized in 1992. JSX is leading, in terms of trading
\nactivities, over the two exchanges because investors and share
\nissuers are favoring JSX.<\/p>\n
BPI was established in 1990 by the Association of Money and
\nSecurities Traders as the first over-the-counter capital market
\nin Indonesia, while SSE was formed in 1989 as the first
\nprivately-owned stock market in Indonesia and the only stock
\nmarket located outside Jakarta.<\/p>\n
Marzuki Usman, JSX's chief commissioner, suggested that
\nIndonesia have only one stock market. \"Why not merge the three
\nstock exchanges into one so that we can create the strongest
\nstock market in the region.\"<\/p>\n
Sharing Marzuki's suggestion, Hasan noted that the merger
\nbetween SSE and BPI might serve as a bridge to one single stock
\nmarket in Indonesia.<\/p>\n
\"A single stock market will create even more efficient stock
\ntrading activities. And I support the idea of having only one
\nstock exchange for Indonesia,\" Hasan said. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/parallel-surabaya-exchanges-go-ahead-with-merger-plan-1447893297",
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