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)