Government may name SSX to trade its bonds

Government may name SSX to trade its bonds

JAKARTA (JP): The government appears likely to appoint the
Surabaya Stock Exchange (SSX) to trade its bonds when they become
valid for trading at the beginning of next year, a senior capital
market official said on Monday.

"SSX has already started trading corporate bonds, thus the
exchange is the most prepared institution to manage the secondary
market for the government-issued bonds next year," said Jusuf
Anwar, the chairman of the Indonesian Capital Market Supervisory
Agency (Bapepam).

The government is expected to issue over Rp 351 trillion in
bonds to finance the recapitalization of the country's ailing
banks.

Last month, the government issued bonds worth Rp 103.81
trillion to recapitalize 23 ailing banks, including three
publicly listed banks. It also issued Rp 53.779 trillion in
index-linked bonds, which will go to Bank Indonesia to repay
emergency credits provided to banks since the financial crisis
hit the country.

The bonds will be tradable beginning next year.

Jusuf said the government also was working on a plan to
refocus the market segments of the country's Jakarta and Surabaya
stock markets.

He said the two markets, which operate in the same market
segment, should have different membership targets.

"The Surabaya Stock Exchange should be to provide the bonds
market and the listing of small to medium size companies, while
the Jakarta Stock Exchange should deal with the bigger and more
established companies," Jusuf said.

He believed derivatives trading could be carried out by both
bourses.

"Despite leaving it to the market forces of supply and demand,
we, as the authority, need to regulate a healthy system for the
two bourses to operate efficiently," Jusuf said in a capital
market seminar sponsored by Antara news agency.

JSX president Mas Achmad Daniri, who also attended the
seminar, said firms listed on both bourses would be affected by
the government move on market segmentation.

"Certain dual-listed companies could be removed from either
exchange, depending on the characteristics of each of the
concerned companies," he said.

Members of the two stock exchanges agreed last year to form a
joint team to study the possibility of merging the bourses. SSX
members eventually turned down the plan. (udi)