Bapepam suspends 16 securities companies

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) has suspended 16 securities houses, mostly members of the Jakarta Stock Exchange (JSX), for failing to meet capital requirements, the chairman of agency said yesterday.

I Putu Gede Ary Suta said that the 16 securities companies were being given until January to increase their capital or lose their licenses.

Putu did not name the 16 securities companies but warned that the increase in their capital was essential for them to continue operating.

He acknowledged most securities companies operating on the Jakarta bourse were financially weak.

Securities houses are required to have a minimum paid-up capital of Rp 10.5 billion (US$2.62 million) to provide brokerage services on the local stock bourses.

Asked if the suspended companies were allowed to merge to enable them to meet the capital requirement, Putu said it was up to them.

"We do not recommend on that but it is up to them. The growing development of Indonesia's capital market requires at least 200 securities houses," he told an annual meeting of the Association of Indonesian Securities Companies (APEI).

Of the 215 securities houses registered on the JSX, only 199 are deemed to have adequate working capital.

Putu said many shareholders of the local securities companies were not serious enough in the stock trading business.

"Owners of securities companies (for example) inject only Rp 500 million in their securities companies while putting more than Rp 2 billion in other businesses," he said.

Speaking on the prospect of securities companies in Indonesia, president of Makindo, Gunawan Yusuf, said that securities companies should be more creative in creating business in the current bearish market.

"If the securities houses depend solely on brokerage fees, they will go bankrupt. But if they are creative in finding new business opportunities they can survive the current bearish market," he said at the gathering.

He said new business opportunities included giving investment advice, investment financing and strategic stake sales to listed companies.

"I think most listed companies in Indonesia would surely welcome any advice like that during this sluggish market," he said.

"The securities houses have hardly tapped these opportunities during the market boom. But now is the time for them to take advantage of these opportunities," he said.

Based on this outlook, he believed that Indonesian securities industries would still survive even though the global and regional stock markets were bearish. (aly)