JSX to improve market surveillance to enhance integrity
JAKARTA (JP): The chief executive officer of the Jakarta Stock Exchange (JSX), D. Cyril Noerhadi, reaffirmed his commitment yesterday to improve the market's surveillance mechanism to enhance market integrity.
"We will continuously upgrade our system of trade monitoring to detect market manipulation or unfair dealings on the market," Noerhadi said at an Indonesia-Australia Business Council (IABC) luncheon.
Market integrity, he said, is vital to the future growth of JSX which now lists 246 companies with a total market capitalization of Rp 175 trillion (US$74.78 billion).
Citing an example, Noerhadi said the JSX has been monitoring Astra share tradings, especially during the last week of massive transactions.
"But we have found nothing unusual in the price movements of Astra shares, unlike those of Bank Mashill last April when we had to temporarily suspend the trading of its shares," Noerhadi pointed out.
Noerhadi was referring to the massive transactions in Astra shares during the last week of September. It was disclosed early this week that the deals were done by the Sampoerna family and their companies. They now become the largest single shareholder, owning 12.66 percent of Astra, the country's largest automobile company.
The luncheon at the Mercantile Athletic Club, which was opened by IABC's President Sabam Siagian, was attended by about 50 businesspeople.
Noerhadi told the luncheon meeting that the JSX management will only take action if it finds unusual price movements.
Inspections
According to Noerhadi, regular and surprise inspections of JSX members are another part of the surveillance mechanism to ensure that all players comply with the laws and rules of the capital market.
He said an effective market surveillance mechanism is one of the JSX management's ongoing programs to make the stock exchange more attractive to share issuers and investors.
Two other programs include the development of a well- functioning trading, clearing and settlement system through scripless and remote trading projects and the dissemination of timely public information by printed documents and electronic distribution.
"Since the capital market thrives on information we set high standards for disclosure. But this information must be processed and packaged in ways to allow for timely public distribution," he added.
He also gave a briefing of other programs being planned to help make the stock market fair, efficient and liquid.
Noerhadi cited the establishment of the Indonesian Securities Clearing Depository, a clearing and guarantee institution and a depository and settlement institution as the supporting infrastructures which will help ensure a well-functioning market.
In addition, he added, scripless and remote trading mechanisms are being developed.
"We should continue to improve our efficiency because of the steady increase in trading volume. The daily turnover at the JSX has increased from 4 million shares in 1991 to 115 million today," Noerhadi added. (vin)