JSX asked to refrain from delisting firms

JSX asked to refrain from delisting firms

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam)
has asked the local stock exchanges to be more tolerant of poorly
performing companies.

Bapepam chairman Jusuf Anwar said that stock exchange
operators should not delist ailing companies even though they no
longer met requirements for listing.

Financial setbacks resulting from the country's worst ever
economic crisis has left many companies short of the criteria
required for stock market listing.

The 80 percent fall in the value of the rupiah against the
U.S. dollar has caused foreign debts to increase by more than 300
percent when expressed in local currency terms and left many
companies on the edge of a financial black hole.

Analysts estimate that more than half of the companies listed
on the country's stock exchanges have been rendered technically
bankrupt by the sharp increase in the rupiah value of their
foreign debts.

"Exchange operators should be more lenient because poor
performances are mostly due to the crisis and not a failure on
the part of company managements," he said in a media briefing
held to mark the 21st anniversary of the Indonesian capital
market.

If Bapepam and exchange operators impose the requirements
strictly then around 90 percent of firms currently listed on the
local market would be delisted, an analyst who asked for
anonymity said.

But according to the Jakarta Stock Exchange (JSX) president,
only 43 companies no longer meet the listing requirements.

JSX president Cyrill Darwin Noerhadi added that 18 of these
companies had explained the reasons for their financial problems
and how they planned to set their affairs in order.

He said the exchange operators would soon meet with executives
from the other 25 companies to hear their accounts of the
financial difficulties currently besetting them.

But he hinted these companies would not be delisted from the
exchange because their financial problems had mainly been caused
by external factors rather than a failure on the part of their
respective managements.

Jusuf Anwar also said yesterday that Bapepam was currently
studying the possibility of introducing asset revaluation to help
the country's cash-strapped companies get fresh funds to improve
their capital bases.

"I would like to remind you that we are still in the process
of studying this possibility" he said.

He said Bapepam had also simplified the procedure for listed
companies to carry out a second share offering so that they would
have no difficulties raising fresh funds through that route.

"God willing, under the new procedure listed companies will be
able to organize a second share offering in only 42 days," he
said, pointing out that under the old system at least 107 days
were required to accomplish a similar feat.

"We are committed to boosting efficiency to improve our stock
market," he said. (aly)