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.