Funds on capital mart reach $5.7b

Funds on capital mart reach $5.7b

JAKARTA (JP): The funds mobilized through the country's
capital market is expected to nearly double to Rp 12 trillion
(US$5.7 billion) this year from Rp 6.8 trillion in 1993, says the
president of the Jakarta Stock Exchange (JSX).

Hasan Zein Mahmud said yesterday that in the first seven
months of this year alone, the public funds raised through the
capital market already exceeded Rp 8 trillion.

"This year's fund mobilization will be higher than that
recorded during the market boom in 1989, when around 60 new
issues were listed," he said.

He said the sharp increase in fund mobilization is possible
due to the significant rise in the number of new issues and the
increase in the volume of limited public offering (rights
issuance).

Hasan said 17 new issues were listed in the January-June
period and that the number is projected to increase to around 30
by the end of the year, rising from only 19 new issues last year
and 14 in 1992.

The market capitalization is also expected to increase to
between Rp 100 trillion and Rp 120 trillion from Rp 69.3 trillion
last year.

He expressed optimism that the capital market would play a
more important role in funding the country's economic activities
in the coming years.

Indonesia needs at least around Rp 660 trillion ($315 billion)
to maintain its economic growth of at least six percent during
the current five-year development plan period. Around 75 percent
of the required investment funds are expected to come from the
private sector.

Hasan acknowledged that the stock trading activities are still
dominated by foreign investors.

The number of local investors are less than one percent of the
country's 188 million people, he said, adding that the number is
still very small as compared to around three million of local
investors in neighboring Malaysia.

He hoped the number of local investors in the country would
increase in the coming years in line with the government's
intensive campaign in attracting the public to enter the stock
market.

The government's recent decision to allow the operation of
open-ended investment funds is expected to further encourage
local investors to invest their money in the capital market, he
said. (hen)