Keep investor confidence: Soeharto
Keep investor confidence: Soeharto
JAKARTA (JP): President Soeharto called on financial
authorities yesterday to maintain and enhance investor confidence
to avoid capital flight.
"Once investors lose confidence in our capital market, they
will quickly and easily move their funds to other countries,"
Soeharto said at the opening of a two-day international
conference on the Indonesian capital market.
This would mean losing the capital the country needed to
finance its development, he said at the two-day conference, held
to commemorate the Capital Market Supervisory Agency (Bapepam)'s
20th anniversary.
Soeharto also called for the need to improve the country's
capital market performance not only to attract investors but also
to encourage more companies to use it as an alternative to
finance their businesses.
Listed companies and other capital market players should
promote transparency because only with business transparency
would they be able to maintain public confidence, the President
said.
Indonesian rupiah and share prices have been under pressure
for several weeks following the devaluation of the Thai baht and
Philippine peso early last month.
The rupiah dropped to a new low of 2,760 against the U.S.
dollar yesterday after Bank Indonesia, the central bank,
abandoned its intervention bands.
Share prices on the Jakarta Stock Exchange (JSX) Composite
Index lost 2.4 percent to 643.01.
In his speech at yesterday's conference, Finance Minister
Mar'ie Muhammad, said the country's capital market needed
improving despite its rapid expansion.
Mar'ie said the capital market required the participation of
all those who had the ability to anticipate international market
trends.
Economic liberalization and the more integrated global capital
market had increased competition and interdependency, resulting
in a greater flow of capital from one country to another, he
said.
"The Indonesian capital market must be able to seize this
opportunity to increase trading volume, market capitalization and
liquidity," he said.
Soeharto said the capital market played a pivotal role in
raising funds for the country's development program.
He said he expected 77 percent of the Rp 815 trillion (US$315
billion) in investment funds needed for the sixth five year
development plan, ending in 1999, would come from the public.
"It is through the capital market that we expect to reach the
investment target," he said.
Also speaking at the conference was Capital Market Society
chairwoman Siti Hediati Prabowo -- one of the President's three
daughters.
Siti Hediati, who owns at least two securities companies, said
she was confident the Indonesian capital market could become the
largest in the Southeast Asian region by the year 2020, given its
rapid development.
Since the country's capital market was reactivated in 1977,
325 companies have listed their shares on the local exchanges,
compared to 27 companies 10 years ago.
At yesterday's conference noted businessman Bob Hasan,
chairman of the Astra Group, spoke about the Indonesian economic
success and its prospects and challenges.
Bob Hasan, known as the country's timber mogul, said the
timber industry provided an excellent case study of how Indonesia
had changed from a modest agricultural society to a prosperous
industrializing country.
"Indonesia's timber industry has evolved from cutting and
selling logs 25 years ago, to becoming the world's largest
exporter of hardwood plywood," he said.
The conference was attended by about 1,200 people, almost half
of whom were international fund managers and will also feature a
market exhibition and investor forum. (das)