Jakarta branch contributes over 90% of SSE's trading volume
JAKARTA (JP): The Jakarta representative office of the Surabaya Stock Exchange (SSE) contributes more than 90 percent to its total share trading volume, says an executive of the market.
Helmy Azwari, the chief representative, said here yesterday that in June alone, his office recorded a trading volume of 90.83 million shares which accounted for 97.71 percent of the East Java-based market's total trading volume.
"Our contribution to the total trading volume has reached more than 90 percent since we began operations," he told The Jakarta Post.
The SSE opened its representative office here last October to give easier access to Jakarta-based investors through its telephone-linkage trading system. It's opening has significantly boosted trading activities.
The market's monthly trading volume reached only between 8.5 million and 47.5 million shares before the opening of the representative office.
"It initially seems odd that transactions at the representative office are greater than those at headquarters. But it is logical since most of the investors are based in Jakarta," he said.
He said that the operation of the representative office has provided investors with more alternatives to buy or to sell their capital hares.
"Investors often take advantage of our lower transaction fees. Some benefit by the difference in prices. Others profit because of the time lag between the transactions on the JSX and SSE," he said.
The SSE was established in 1989 and its operation is given the full support of the Capital Market Supervisory Agency (Bapepam), which used to require new stock issuers list their shares both on the JSX and SSE. The double listing requirement was lifted last year following the privatization of the JSX. This forced the SSE to cut both its listing and transaction fees to make the market remain attractive to share issuers and the investing public.
Unity
Many capital market analysts have suggested the government unite the two markets in order to cut operational costs.
Helmy said that the operation of the two markets remains important to avoid a monopoly, which could hurt both the investing public and listed companies.
"The operators of the two market have to compete each other to attract investors and share issuers. This will consequently benefit capital market players," he said.
He said the capital market is still relatively new and that an intensive promotion is needed to encourage the public to engage in stock trading activities.
If each of the country's stock exchanges -- the JSX, the SSE and the Over-the-Counter market -- has a special program to promote public awareness about the market, the result will then be better than if the promotion drive was carried only by a single agency, he said.
"We need more than one market as we are still in the process of learning," he said.
The total trading on the SSE increased sharply to 266.8 million shares worth around Rp 1.14 trillion (US$542 million) last year from only 38.1 million shares worth Rp 136.5 billion in the previous year.
As many as 160 public companies were listed on the SSE as of March, with total market capitalization of around Rp 63.81 trillion, in addition to 29 bond issuers. (hen)