JSX threatens to delist four publicly-listed firms

JSX threatens to delist four publicly-listed firms

JAKARTA (JP): The Jakarta Stock Exchange (JSX) is threatening
to delist four publicly listed companies whose shares have not
been traded for the last six consecutive months, the bourse's
trade director said over the weekend.

"We have sent warning letters to the four companies and we are
waiting for their responses," Mas Achmad Daniri said.

The companies are PT Great Golden Star, whose share price was
recorded at Rp 9,900 (US$4.10) last Friday, PT Lenggang Makmur
Plastic, Rp 1,425, PT Pool Asuransi Indonesia, Rp 3,700, and PT
Asuransi Bina Dharma Arta, Rp 1,500.

JSX has the right to delist its members for several reasons,
including the lack of trading on their shares for six consecutive
months, the number of their shareholders being less than 100 for
three consecutive months, manipulating their financial
statements, their total equity is less than Rp 3 billion or they
suffer losses for three consecutive years.

JSX must announce a delisting plan not less than 30 days in
advance of the effective delisting date.

Several companies have been delisted from the JSX in the last
two years. They included PT Praxair, PT Singer Indonesia and PT
Textronics.

According to Indonesian Capital Market Supervisory Agency
(Bapepam) chairman I Putu Gede Ary Suta, illiquid shares not only
harm their issuers and investors but also the capital market as a
whole.

"Delisting is one of many sanctions aimed to encourage share
issuers to improve the liquidity of their stocks," he said.

Daniri said over the weekend that JSX would give the four
companies the opportunity to enhance the liquidity of their
shares on the capital market.

"If their share liquidity cannot be improved, we will delist
them," he said.

He acknowledged that shares could be inactive on the capital
market for a long period of time for several reasons. "Shares,
for example, can be inactively traded if the executives of the
companies are not transparent to their shareholders," he said.
"Another reason is that the companies perform badly which
discourages investors from buying their shares."

The four companies still have the opportunity to hold a
hearing with the JSX's listing committee, which will make
recommendations to JSX on its final decision.

Putu said 14 shares or 5.4 percent of the 254 listed shares on
the JSX were rarely traded. "Only 20 percent -- in terms of
capitalization -- of the shares listed on the JSX are traded
actively each year," he said.

In comparison, Kuala Lumpur had 60 percent of its listed
shares actively traded, Hong Kong 51 percent and Singapore 30
percent, he said.

He said that total funds mobilized on the JSX until the
beginning of March were recorded at Rp 63.4 trillion, including
Rp 51.2 trillion in stocks and Rp 12.2 trillion in bonds, with
market capitalization of Rp 233.8 trillion. For the last several
months, daily transaction volume was about Rp 300 billion per
day. (10)