JSX suspends four brokerage firms

JSX suspends four brokerage firms

JAKARTA (JP): The Jakarta Stock Exchange (JSX) suspended four
stock broking houses yesterday for failing to deliver Bank Pikko
shares to their buyers within nine trading days of the
transactions.

The broking houses were PT Finan Corpindo Nusa, PT Artha
Gitasejahtera Sekuritas, PT Bumi Artha Securindo and PT Mentari
Securindo.

"The four companies failed to deliver Bank Pikko shares to the
buyers within nine days after the transactions on April 8," the
JSX said.

Finan Corpindo failed to deliver 105,000 Bank Pikko shares,
Artha Gitasejahtera 72,500 shares, Bumi Artha 2,500 shares and
Mentari 2,500 shares.

On Tuesday the Capital Market Supervisory Agency questioned
three JSX directors over trade in Bank Pikko shares on April 8,
when the bank's shares soared 207 percent to Rp 4,000 in just
four hours before being suspended.

The directors questioned were the JSX's president director,
Cyril Nurhadi, the supervision director, Edwin Stambul, and the
trading director, Mas Achmad Daniri.

The agency said yesterday it was also investigating more than
100 broking houses which traded Bank Pikko that day.

The agency said such a big increase was unrealistic and
probably engineered.

It blamed the rise on inadequate market surveillance by the
JSX.

But the head of the agency's transaction and securities
bureau, Agus Muhamad, refused to comment yesterday on the
questioning of the three broking houses.

"Wait until Friday. We will announce the results of the
investigations then," he said.

Many securities analysts saw the trading of Bank Pikko shares
on April 8 as market cornering.

Market cornering can happen when one investor has enough
shares to enable him manipulate the price.

Analysts said Bank Pikko shares rose astronomically because
many investors sold short.

Selling short is when an investor sells a stock he does not
own, believing he will be able to buy it back later at a lower
price, thus profiting from the difference.

"Many investors lost a lot of money because they had to buy
the shares at a very high price," one analyst said.

But Bank Pikko's shares did not tumble as the short sellers
expected but kept rising until the stock was suspended. This left
many investors licking their wounds.

Bank Pikko was suspended at 2:23 p.m. and relisted on April 10
immediately after the April 9 holiday.

"The trading of Bank Pikko's shares did not breach trading
regulations and was in line with capital market mechanisms," said
the JSX's president, Cyrill.

Bank Pikko share price fell Rp 425 to Rp 2,325 yesterday. (09)