President vows to strengthen capital market<\/p>\n
JAKARTA (JP): President Soeharto pledged here yesterday that
\nthe government will further develop the country's capital market
\ninto a more attractive and efficient financing alternative.<\/p>\n
Speaking at the opening of a two-day international conference
\non the capital market, the President said that revitalizing the
\ncapital market is essential to supporting the country's growing
\neconomic activities.<\/p>\n
Indonesia needs fresh investment funds of at least Rp 660
\ntrillion (US$315 billion) to maintain the projected economic
\ngrowth of 6.2 percent per annum during the sixth Five Year
\nDevelopment Plan (Repelita VI) period, which began in April, the
\nPresident said.<\/p>\n
\"The operation of capital markets is, therefore, increasingly
\nimportant in meeting the country's economic target since 73
\npercent of the required investment funds should come from the
\nprivate sector,\" he told around 1,500 foreign and domestic
\nexecutives.<\/p>\n
The conference, sponsored by the Capital Market Supervisory
\nAgency (Bapepam), the Jakarta Stock Exchange (JSX), the Jakarta
\noffice of the U.S. Agency for International Development (USAID)
\nand the PACAP Research Center at the University of Rhode Island,
\nfeatures noted world economists, including Merton H. Miller, the
\n1990 Nobel Laureate, Mitsuo Sato, the president of the Manila-
\nbased Asian Development Bank, and Richard W. Roll, a professor of
\ninsurance and finance at the University of California at Los
\nAngeles.<\/p>\n
An exhibition featuring activities of capital-market
\nsupporting agencies and listed companies is also being held in
\nconjunction with the conference.<\/p>\n
Soeharto acknowledged that the country's capital market is
\nstill infant as compared to capital markets in more developed
\nnations.<\/p>\n
\"We feel encouraged, however, that it has shown quite rapid
\ngrowth and the people are more aware about the importance of the
\ncapital market for long-term investments,\" he said.<\/p>\n
Soeharto said that the government will continue to develop the
\ncapital market more rapidly in the future and to further
\nencourage private companies and state-owned firms to raise
\ninvestment funds through the capital market.<\/p>\n
Finance Minister Mar'ie Muhammad said he was upbeat that the
\ncountry's capital market will become one of the largest, if not
\nthe largest, capital market in Southeast Asia, considering the
\nstrength of the country's economy.<\/p>\n
New measures<\/p>\n
Mar'ie said a number of measures have been set forth to
\nfurther develop the capital market, from securities trading
\nmechanisms to its legal infrastructure.<\/p>\n
A new capital market law, soon to be submitted to the House of
\nRepresentatives (DPR), will hopefully be enforced early next year
\nto replace the outdated Capital Market Law of 1952, he said.<\/p>\n
Mar'ie said significant advances have also been made in
\nsecurities trading activities, including the computerization of
\nshare clearing and settlement activities as well as the
\nconstruction of a new stock market building.<\/p>\n
Hasan Zein Mahmud, the JSX president, said trading automation
\nwill be introduced as soon as the exchange occupies its new
\nbuilding, which is now under construction on Jl. Sudirman in
\nSouth Jakarta.<\/p>\n
\"We expect to be able to also introduce a scripless trading
\nsystem early next year,\" he said, adding that the introduction of
\nthe new system and the enforcement of the new capital market law
\nwill mark a breakthrough in the country's capital market history.<\/p>\n
Trading automation will be also introduced on two other stock
\nexchanges, the Surabaya Stock Exchange and the Over-the-Counter
\nmarket.<\/p>\n
As many as 220 companies have so far tapped the capital market
\npotential to raise funds for their investment projects and,
\naccording to Bapepam, funds raised by both share and bond issuers
\nalready hit a spectacular figure of over Rp 25.59 trillion
\n(US$12.18 billion) as of May. Trading volume has also
\nsignificantly increased in the last three years.<\/p>\n
The daily trading turnover on the JSX, for example, more than
\ndoubled to over Rp 77.6 billion in 1993 from Rp 30 billion in
\n1990. Market capitalization soared by over 558 percent to Rp 69.3
\ntrillion as of the end of 1993 from a mere Rp 12.4 trillion as of
\nthe end of 1990. (hen) Holdings -- Page 10<\/p>",
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