Securities firms and share issuers back JSX, SSX merger<\/p>\n
JAKARTA (JP): The Association of Indonesian Securities
\nCompanies (APEI) and several listed companies said on Tuesday
\nthey supported the merger of the Jakarta and Surabaya stock
\nexchanges.<\/p>\n
They believed it was the best alternative to improve stock
\ntrading efficiency.<\/p>\n
\"Rather than having two wounded bourses in Indonesia, we had
\nbetter have one efficient bourse,\" APEI's chairman Yannes Naibaho
\nsaid at a capital market seminar sponsored by economic magazine
\nInvestor.<\/p>\n
He acknowledged there was no guarantee that merging the two
\nbourses would result in improved efficiency, but he said the move
\nwould at least provide a greater opportunity toward achieving the
\naim.<\/p>\n
Analysts emphasize the country needs a more efficient bourse
\nto attract foreign investors to help forge economic recovery.<\/p>\n
The crisis-hit domestic economy and political instability have
\nassailed the performance of Indonesian capital markets. The
\naverage trading value on the Jakarta Stock Exchange (JSX) dropped
\nto between Rp 150 billion and Rp 200 billion from the precrisis
\nRp 500 billion.<\/p>\n
The current average trading volume is even lower than the Rp
\n425 billion daily break-even level.<\/p>\n
Activities on the Surabaya Stock Exchange (SSX), which trade
\nthe same companies, were subdued even before the crisis. At
\npresent, the average daily transaction value on the Surabaya
\nbourse is about Rp 12.5 billion from Rp 43.7 billion in 1997.<\/p>\n
Poor financial conditions of the listed companies and a
\nsignificant decrease in trading volume on the two bourses should
\nbe factors to consider in deciding whether to merge the bourses,
\nYannes said.<\/p>\n
President of listed PT Tambang Timah Erry Riyana endorsed the
\nmerger, saying it would reduce the burden of the listed firms.<\/p>\n
He said that paying double listing fees for the bourses
\nimposed a burden on listed companies, most of which are facing
\nliquidity problems.<\/p>\n
Other listed companies also complained that listing on the
\nvirtually inactive Surabaya bourse was a waste of funds because
\nmost investors conducted their transactions through the Jakarta
\nmarket. The latter has opened remote trading facilities in the
\ncountry's major cities to allow investors to conduct transactions
\nfrom outside the capital.<\/p>\n
In the early 1990s, companies listed on the JSX were allowed
\nto trade their shares on the Surabaya market for free, but the
\npolicy ended following JSX's privatization in 1994. Now all
\ncompanies have to pay listing fees to both bourses.<\/p>\n
Although several companies have quit the Surabaya market, many
\nothers remain because of what sources termed an \"unwritten
\nrequirement\" from the Capital Market Supervisory Agency
\n(Bapepam).<\/p>\n
Erry said JSX could also open an additional trading board to
\nfacilitate activities of small companies or those which no longer
\nmet the listing requirement due to declining performance.<\/p>\n
Former JSX and SSX presidents Hasan Zein Mahmud and Basjirudin
\nSarida opposed the merger.<\/p>\n
\"People are always talking about efficiency in terms of the
\ninternal conditions of JSX as a business entity. We should think
\nof efficiency in terms of public service,\" Hasan said.<\/p>\n
Hasan believed it would be better for SSX to change its
\npriority to small and medium companies.<\/p>\n
\"The listing requirement should therefore be eased to enable
\nsmall and medium companies to list their shares on the bourse,\"
\nhe said .<\/p>\n
Basjirudin shared Hasan's view, saying that the merger should
\nnot be left solely to the bourse members' decision, but also to
\nthe government.<\/p>\n
He criticized the government's hands-off policy on the merger
\nplan.<\/p>\n
\"We all should not look at JSX and SSX only as business
\nentities, but as the national financial institution which
\npossesses oligopoly rights in the country's capital market.\"<\/p>\n
He said the decision should not be left up to the bourses'
\nmembers because their decision could be overly business-oriented.<\/p>\n
JSX and SSX will hold their extraordinary shareholders general
\nmeeting between April 15 and April 23 to decide on the planned
\nmerger. (02)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/securities-firms-and-share-issuers-back-jsx-ssx-merger-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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