JSX expects losses this and next year

Rendi A. Witular, The Jakarta Post, Jakarta

The Jakarta Stock Exchange (JSX) expects losses for this year and next year due to a higher burden of operating costs and a lower income from trading activities.

In an extraordinary shareholder meeting on Wednesday, the company put its pre-tax losses for this year at an estimated Rp 2.45 billion (US$295,301).

Operating and non-operating revenues are expected to total Rp 76.55 billion this year, but the cost burden is projected to increase to Rp 79 billion.

Company president Erry Firmansyah said that the rise in the cost burden was mainly caused by higher overhead costs such as salary and equipment costs.

He also explained that the transactions in the bourse slowed in the first semester of the year, as many investors stayed away from the bourse because of the war in the province of Aceh, terrorism fears and the slow pace of the recovery of the real sector.

Earlier, the JSX said that daily transactions at the bourse from January to June averaged Rp 300 billion, a 40 percent drop from the average value from a year ago. The company's target daily average transaction value for this year is Rp 600 billion.

The company's net profit for the first half dropped by 94 percent to a mere Rp 640 million from Rp 10.8 billion in the same period last year, while revenues fell to Rp 39.2 billion from Rp 53.4 billion.

Early this year, the JSX targeted a net profit of Rp 2.4 billion.

Erry said the JSX had lowered its daily volume projection from Rp 600 billion to Rp 424 billion this year, while the number of IPO projections had been reduced from 40 companies to just 10.

In 2004, Erry said that the upcoming general election would overshadow investors' interest in making transactions at the stock market.

Lower trading volume at the market will mean lower fees for the JSX.

Erry explained that the JSX management would implement a more prudent policy in order to prepare for the general election season, which could cause political instability and, thus, an adverse impact on the bourse's activities.

For 2004, JSX has estimated a loss of Rp 1.3 billion with operating costs projected at Rp 85.6 billion and operating and non-operating revenues at Rp 84.3 billion.

In terms of value, daily transactions are expected to increase to an average of Rp 500 billion, while 20 companies were expected to launch IPOs, Erry said.