Resources sector should not be held to JSX trading rules<\/p>\n
JAKARTA (JP): The rules for listing on the Jakarta Stock
\nExchange should contain an exception for resources companies if
\nthey are to be encouraged to list their shares on the capital
\nmarket, analysts said yesterday.<\/p>\n
\"Several major changes are needed, including an exemption to
\nlisting rules for mining and exploration companies,\" PT Panin
\nSekuritas's technical advisor, Tom Soulby, told a seminar on \"The
\nIndonesian Capital Market and the Resource Sector\".<\/p>\n
\"Resource sector shares on the JSX are now under-developed,\"
\nSoulby said, without citing the current listing rules as the main
\ncause.<\/p>\n
Currently, only three resources companies -- oil mining
\ncompany PT Medco Energi, nickel mining firm PT Inco and tin
\nmining corporation PT Tambang Timah -- have floated their shares
\non the JSX.<\/p>\n
Data from the JSX show that of the three companies, only
\nTambang Timah has been performing well on the capital market,
\nwhile the prices of Inco and Medco shares have declined since
\nlisting.<\/p>\n
\"Moreover, the two stocks are inactive,\" said JSX president
\nCyril Noerhadi.<\/p>\n
Soulby said that the resources sector in the Indonesian equity
\nmarket will represent a significant portion, more than 20
\npercent, of the JSX's total market capitalization by 2010.<\/p>\n
Rules<\/p>\n
JSX rules stipulate that any company to be listed must have
\nbeen in operation for at least three years, have booked profits
\nin the last two consecutive years, have a minimum authorized
\ncapital of Rp 20 billion (US$8.5 million) and a minimum paid-up
\ncapital of Rp 7.5 billion.<\/p>\n
The rules imply that only established companies can be listed
\non the exchange. However, resources companies generally need a
\nlonger period of time to book profits than firms operating in
\nother sectors.<\/p>\n
\"How can resources companies make a profit if they're still in
\nthe exploration stage,\" a PT Tambang Timah executive said.<\/p>\n
Rob Hogart from KPMG of Australia suggested that the JSX allow
\nfor a capital risk concept instead of profit risk for resources
\ncompanies.<\/p>\n
Cyril said that start-up companies, including resources
\ncompanies, can list on the Surabaya Stock Exchange (SSX).<\/p>\n
SSX rules even allow companies suffering from losses to list.<\/p>\n
\"It's actually a joint program whereby the SSX acts as a
\nbridging exchange for newly-established companies and small size
\ncompanies,\" Cyril said.<\/p>\n
\"But the SSX is not as good as the JSX. We don't see many
\nforeign players there,\" Soulby said to The Jakarta Post.<\/p>\n
Chairman of the Capital Market Supervisory Agency I Putu Gede
\nAry Suta, who opened the seminar, added: \"There are no
\nrestrictions on the current listing rules for resources stocks
\nalthough those stocks often involve greater risk than those
\noperating in industrial and commercial sectors.\"<\/p>\n
\"The listing rules are determined by a stock exchange's
\nmembers, not by the government,\" Putu contended.<\/p>\n
Other speakers at the seminar sponsored by ANZ securities of
\nAustralia, Panin Sekuritas and KPMG, were BHP's president Colin
\nSmith, Crish Bain from ANZ Securities and Director General of
\nMines Kuntoro Mangkusubroto. (alo)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/resources-sector-should-not-be-held-to-jsx-trading-rules-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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