Jakarta bourse plans two trading sections

Jakarta bourse plans two trading sections

JAKARTA (JP): The Jakarta Stock Exchange (JSX) plans to divide
listed companies into two categories, each of which will have its
own trading section, in an effort to stimulate trading
activities.

Any company that has been listed on the exchange for at least
12 months can be classified in the first category if it meets
certain criteria. They include having a paid-up capital of at
least Rp 50 billion ($23.35 million) and a total equity of no
less than Rp 60 billion.

Companies with a paid-up capital of between Rp 50 billion and
Rp 100 billion will be grouped in the first category only if the
number of minority shareholders, or the investing public, is
1,000 or more, according to the draft of the exchange's new
regulation.

The stock holding of the investing public in any company from
the first section should account for at least 25 percent of the
paid-up capital of Rp 50 billion, 20 percent for above Rp 50
billion to Rp 100 billion and 18 percent for between Rp 100
billion and Rp 200 billion and 15 percent for above Rp 200
billion.

The draft of the regulation will be presented during the
annual meeting of the exchange members next month or in March.

The ratio between earnings from operation to the equity in the
latest financial report should be at least eight percent, while
the dividends should be at least 10 percent above the average of
the amount of the dividends in the second section.

The stocks should be liquid with an annual transaction volume
of at least one percent of the total listed stocks, according to
the planned regulation.

The Association of Public Companies, however, has opposed the
proposed listing regulation, saying that it is too restrictive.

Kusyadi Kuyono, the general secretary of the association, said
that the criteria for the promotion in the main board or the
first section is too strict for existing companies.

"Only a score of companies will meet the criteria. It is not
rational, especially if the rule is enforced on companies already
listed on the exchange," Kusyadi said.

Kusyadi, also an executive of the publicly listed Mulia
Industrindo, asked the exchange to reconsider its plan to
introduce the first trading section.

"It will be wiser if the new listing rule is enforced only to
new listings," he said.

Companies already listed on the exchange could be considered
pioneers and deserving of privileges from the exchange's
authority, he said.(hen)