DBS Securities might quit Indonesia

DBS Securities might quit Indonesia

SINGAPORE (Bloomberg): PT DBS Securities Indonesia, an arm of Southeast Asia's largest banking group, has discussed surrendering its share trading license in Indonesia, the country's market watchdog said.

"DBS Securities has talked to my staff earlier about its plan to close the office and send its license back to us," said Arys Ilyas, director of market institutions and trading at the Capital Market Supervisory Agency, or Bapepam.

His comments came a day after DBS Group Holdings Ltd., the region's largest financial services group by assets, denied it intended to give up its license.

DBS Securities Indonesia, 75 percent owned by DBS Group, could either sell the license to a new investor or write to return it to the watchdog, Ilyas said. Bapepam hasn't received a letter from DBS, he said.

Earlier, Mieke Resmiati, a DBS Securities Indonesia director, said shrinking trading volume and a poor market performance were the main reasons for a decision to withdraw from Indonesia.

DBS Group stood by yesterday's denial.

"We have no plans to exit any business in Indonesia," Chuck Newton, the group's spokesman, said Thursday. "Just because we're talking, doesn't mean we're going to do it."

DBS' talks with the market regulator underscore concern about the future of Indonesia's stock markets, roiled by a plunge in the rupiah and stock prices in the wake of the crisis and by a recent bombing at the nation's main exchange.

Indonesia was hard hit by the 1997-1998 Asian financial crisis, which led to a recession that devastated the economy and contributed to ethnic, religious and secessionist violence across the country. On Sept. 13, a bomb exploded in the Jakarta Stock Exchange building, killing more than a dozen people.

The country's benchmark stock index, the Jakarta Composite Index, has plunged from a pre-crisis high of over 740 points to about 424 points Thursday.

Ilyas said about four foreign stock brokerages have given up their licenses since the currency crisis broke in 1997. Deutsche Bank Securities returned its license to Bapepam in 1997, he said, but re-applied earlier this year to resume trading.

DBS Securities Indonesia has been scaling down its operations in Indonesia since the currency crisis began. It has eight people in the nation, and at end-July was ranked 166 out of 197 brokerages registered with the Jakarta Stock Exchange in terms of transaction volume.