Bourses sign merger pact

JAKARTA (JP): PT Bursa Efek Surabaya, the manager of the Surabaya Stock Exchange (SSE), signed a merger agreement on Saturday with PT Bursa Paralel Indonesia (BPI), the manager of the Jakarta-based parallel market, after five months of intensive negotiations.

Under the agreement, the SSE will take over the assets and operations of the BPI, which manages the over-the-counter market of small and medium-scale companies and manages odd lot (less than 500 stocks) stock trading.

The BPI itself will be liquidated at an extraordinary shareholders' meeting next week.

"But this deal is not an acquisition in the real sense because of the cross shareholdings of the two exchange-managing companies," SSE president Basjirudin A. Sarida noted after the signing of the agreement.

Basjirudin added that the SSE would continue to operate under its old name and that its management would be maintained.

He said the SSE would conduct odd lot transactions and operate the over-the-counter bourse in Jakarta in addition to its ordinary stock transactions in Surabaya.

The SSE was initially favored by the government's double listing policy which required share issuers to list their shares both on the Jakarta Stock Exchange (JSX) and on the SSE. But the policy was abolished following the privatization of JSX in 1992.

BPI president Tito Sulistio also declined to call the deal an acquisition. "This is a merger, because the BPI's shareholders also become the SSE's shareholders," he said.(04)