Securities firms consolidate their operations<\/p>\n
JAKARTA (JP): A number of local securities companies are
\nengaged in massive cost-cutting programs to cope with the
\neconomic crisis -- laying off key personnel and consolidating
\nbusiness units.<\/p>\n
Deutsche Morgan Grenfell, for example, announced early last
\nweek that its Indonesian equities operations would be
\nconsolidated into its Hong Kong and Singapore hubs.<\/p>\n
The firm's head of Equities Asia and Australia, Mark Cullen,
\nsaid this would enable the company to integrate its regional
\noperations more effectively into its global equities platform.<\/p>\n
\"It will concentrate our salesforce where the majority of our
\ninstitutional clients are located and significantly reduce
\noperating cost,\" he said.<\/p>\n
Industry sources said many securities companies were shedding
\nhighly paid, key personnel due to spiraling costs resulting from
\na plunge in the rupiah's value against the U.S. dollar.<\/p>\n
\"Foreign executives who are paid in U.S. dollars are the main
\ntargets of lay-off measures,\" the source said.<\/p>\n
Most securities houses earnings are in rupiah as they generate
\ntheir earnings through transaction fees in the Jakarta Stock
\nExchange.<\/p>\n
Laying off expensive staff is not the only cost cutting
\nmeasure being taken.<\/p>\n
Many brokerage houses are also leaving expensive offices.<\/p>\n
Some of the brokerage houses currently occupying the expensive
\nJakarta Stock Exchange building will soon move to cheaper
\nbuildings.<\/p>\n
\"Most rental fees are in dollars and the sharp fall of the
\nrupiah against the greenback has caused an over 300 percent
\nincrease in rental costs,\" a source said.<\/p>\n
\"The securities business (situation) is getting worse not
\nmerely due to the rupiah plunge. A persistent drop in share
\nprices has scared away investors,\" the source added.<\/p>\n
Indonesia is the worst-hit country in the region which is
\nbeing battered by monetary crisis.<\/p>\n
The rupiah has falling about 80 percent against the dollar
\nsince July last year and stock prices have fallen 28 percent over
\nthe same period.<\/p>\n
The rupiah closed the week at 9,400 Friday against a regular
\n2,450 in early July last year. The Jakarta Stock Exchange
\ncomposite index closed the week at 535.42 points against 740.83
\npoints on July 8 last year.<\/p>\n
PT DBS Securities Indonesia, 85 percent owned by DBS Bank of
\nSingapore and 15 percent by the Gajah Tunggal Group of Indonesia,
\nis also taking cost-cutting measures.<\/p>\n
A reliable source in the company told The Jakarta Post late
\nlast week that about seven top foreign and local executives,
\nmostly paid in U.S. dollars, would be laid off this week or next
\nweek.<\/p>\n
The source said the executives were working in the firm's
\nresearch, sales and marketing departments.<\/p>\n
DBS Securities Indonesia employs 50 people in low level to top
\nlevel management positions.<\/p>\n
The source said lower ranking management staff would be
\nmaintained as the company would continue its operations in
\nIndonesia.<\/p>\n
Previous reports said PT Sasson Securities Indonesia, PT
\nCredit Lyonnais Capital Indonesia and PT Lippo Securities had
\nmade major lay-offs due to financial problems.<\/p>\n
Early last November, Lippo Securities, one of the first
\nsecurities companies listed on the Jakarta Stock Exchange, fired
\nseven top executives as part of its efficiency program. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/securities-firms-consolidate-their-operations-1447893297",
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