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)