Price intervention just temporary measure: Bapepam<\/p>\n
JAKARTA (JP): Chairman of the Capital Market Supervisory
\nAgency (Bapepam) Bacelius Ruru said Saturday that the agency's
\nprice intervention is just a temporary measure.<\/p>\n
He said the price intervention is aimed at protecting the
\ninvesting public and that it will be removed when the market is
\nmore mature.<\/p>\n
Bapepam limits prices of shares on the primary market to a
\nmaximum of 13 times the price earning ratios to protect the
\ninvesting public from a high price dilution on the secondary
\nmarket.<\/p>\n
\"The most important thing is how to promote the transparency
\nin stock trading activities,\" Ruru said in a meeting with The
\nJakarta Post at his office.<\/p>\n
During the meeting, Ruru made a correction on the Post's
\narticle on Bapepam's price intervention published on Saturday.<\/p>\n
Bapepam has no plan at all to defend its price intervention
\npolicy, Ruru said, adding that price intervention in Indonesia,
\nan emerging market, is imposed as a temporary remedy.<\/p>\n
In his address at the end of a three-day international
\nconference on the capital market Friday, Ruru said that an
\nadequate legal framework is also essential to protect investors'
\ninterests.<\/p>\n
\"Furthermore, the market must be sufficiently transparent to
\nensure investors equal access to accurate material information,\"
\nhe said.<\/p>\n
Accuracy<\/p>\n
The Bapepam chairman said a company may legitimately raise
\ncapital from the public even for the most risky investment as
\nlong as full and accurate disclosure is provided.<\/p>\n
By providing sufficient financial disclosure, it is believed
\nthat informed investors will be able to make competent investment
\ndecisions in accordance with their needs, he said.<\/p>\n
Ruru said the shifting of the Indonesian capital market ruling
\nfrom the so-called merit system to a disclosure system is also
\nimportant in better protecting the investing public.<\/p>\n
A disclosure system assumes that investors are able to make
\nintelligent investment decisions if they are given sufficient and
\ntruthful information regarding public companies, he said.<\/p>\n
\"The disclosure system also assumes that investors need
\nassistance from the government only in assuring that the
\ninformation is available, not in evaluating the information,\" he
\nsaid.<\/p>\n
Ruru said that, in contrast, the merit regulation scheme is
\nbased on the assumption that investors lack the capability in
\nmaking intelligent decisions on their own as to whether to buy,
\nsell or hold securities.<\/p>\n
The so-called disclosure system means to induce more mature
\nand responsible markets by demanding diligence from market actors
\nand professionals, he explained. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/price-intervention-just-temporary-measure-bapepam-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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