JSX chief proposes more leeway for foreigners

JAKARTA (JP): President of the Jakarta Stock Exchange (JSX) Hasan Zein Mahmud has proposed more leeway for foreign investors to allow them to buy all, instead of the present 49 percent maximum, of the shares listed on JSX.

Hasan Zein was quoted by the Antara news agency as saying on Friday that his suggestion is in line with the new official policy of permitting 100 percent foreign ownership of companies in Indonesia.

"I hope the new ruling will also be effective to portfolio investments so that the JSX gets a significant boost," he said.

He saw it as an emulation of Malaysia's capital market policy permitting foreigners to buy 100 percent of listed shares on the Kuala Lumpur Stock Exchange secondary market. The percentage is limited only in the primary bourse.

"The ruling benefits Malaysian investors who are free to buy at cheaper prices at the primary market and sell with profit to foreigners on the secondary market," Hasan.

To allay fear of takeovers by foreigners, Hasan Zein recommended the stipulation of a complementary ruling giving foreigners only 49 percent of the voting power relating to the appointment of corporate management as in some other countries.

Hasan Zein predicted the market capitalization of the JSX this year to hit Rp 100 trillion (US$46.2 billion), up 30 percent from Rp 69.3 trillion last year, though progress was slow up through May when the capitalization rose only to Rp 74.6 trillion. "Many new issues have entered the exchange, while existing issues are expanding and share prices steadily rising," he said. (17)