Capitalization of JSX may reach $244b by 2000
Capitalization of JSX may reach $244b by 2000
JAKARTA (JP): Market capitalization on the Jakarta Stock Exchange (JSX) is likely to reach Rp 562.1 trillion (US$244.4 billion) by the year 2000, the Capital Market Supervisory Agency projected yesterday.
At a hearing with the Budgetary Commission of the House of Representatives, the agency's chairman, I Putu Gede Ary Suta, said that his prediction was based on the fact that market capitalization on the JSX has grown by an average of 30 percent per annum from Rp 12.4 trillion in 1990 to Rp 151.9 trillion by the end of 1995.
"However, as chairman of the agency, I don't want to make a special target (for the JSX) because the growth of any stock market depends on a number of factors, including macroeconomic factors and market sentiments," Putu said.
From a macroeconomic point of view, Putu said, high interest rates domestically will discourage people from investing their money on stocks. Instead, they will probably prefer investing on fixed-income instruments.
Putu also expressed concern over negative factors influencing the JSX, including a relatively high transaction fee, compared with those imposed by stock exchanges in developed countries.
The transaction fee imposed by the JSX currently stands at 0.07 percent of the transaction value. Of the collected transaction fee, 60 percent goes to the JSX and the rest goes to PT Kliring Deposit Efek Indonesia (Indonesian Securities Clearing and Depository)
JSX president Hasan Zein Mahmud said recently that his organization was ready to cut its transaction fee provided the use of its trading facilities increased significantly.
He said that currently only 10 percent of the trading facilities, which can accommodate up to 50,000 transactions a day, are in use.
"If we can increase the usage of the facilities to 20 percent, I can cut the transaction fee by 50 percent," Hasan told journalists recently.
Putu noted yesterday that the costs borne by investors and stock dealers not only cover the official transaction fee but also the time lag between the transaction and the settlement.
"Currently, stock market players consider other costs (on investing on the JSX) still expensive," Putu said.
Apart from the high transaction fee, Putu expressed his optimism on the development of the JSX, especially after the implementation of the stock market law, which will give more legal certainty to capital market players.
To help implement the law, Putu said that his office had issued 83 rulings on 88 subjects, in addition to two government regulations and three finance minister rulings.
He revealed that his office will soon issue 22 new rulings to complete the existing regulations to support the stock market law. (04/rid)