Parallel bourse, SE will be merged: Ruru
Parallel bourse, SE will be merged: Ruru
JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) has approved of the planned merger of the Surabaya stock exchange (SSE) and the over-the-counter market.
Bapepam's Chairman Bacelius Ruru told reporters yesterday that the merger's objective is to create a synergy for the further development of the capital market in the country.
"The merger will make the new bourse complementary to the Jakarta Stock Exchange (JSX) because the merged bourses will apply the trading system currently used by the Nasdaq Stock Market in the United States," Ruru said.
The chief of the over-the-counter market (locally known as the parallel bourse), Tito Sulistio, said yesterday that the merger process was now undergoing final preparations.
"We hope it will be completed before the end of the year," Sulistio added.
The capitalization of the Surabaya stock exchange was estimated at Rp 103.8 trillion and that of the over-the-counter market at Rp 1.2 trillion as of last December, not including bonds.
Ruru also disclosed yesterday that his agency is now reviewing the procedures for initial public offerings.
"One of the changes being mulled over is to allow the primary offering prices to be determined fully by the market forces as is usually done on the international stock exchanges," Ruru said.
At present, he said, the primary offering prices are set before the IPO period by the issuer and managing underwriter.
Ruru added that he might also question the issuers and the managing underwriters of share issues which had long been hovering below their primary offering prices and which had barely recorded any transactions since their listing.
Bright future
Ruru, quoting a study on the Indonesian stock market made by the Salomon Brothers securities company, said that Indonesia's stock exchange has a brighter future, seen from price earnings ratio (PER), earning per share (EPS) and dividend incomes.
He said even though the JSX lost 20 percent last year, its PER will average 15.4 times this year, down from 22 times last year, compared to 10.3 times in Hong Kong, 20.7 times in Taiwan, 20.3 times in Malaysia, 19.1 times in the Philippines and 17.3 times in Thailand.
Ruru was optimistic that the EPS on the Indonesian stock market would reach 28 percent this year, compared to 18 percent in Thailand and Taiwan, and 17 percent in Hong Kong and Singapore and 16 percent in Malaysia.
"The dividend yield also will register substantial growth to an average 2.2 percent this year, better than Malaysia which will see a 1.6 percent yield, Taiwan 1.1 percent and the Philippines 0.7 percent," he said.
Ruru also foresaw a further increase in the market capitalization from Rp 105.2 trillion (US$45 billion) last year which represented a hefty gain from Rp 69.30 trillion at the end of 1993.
"There is still much room for growth because the market capitalization accounts for only about one third of Indonesia's gross domestic product," Ruru noted.
He added that a total of Rp 33.2 trillion in fresh funds were raised through the JSX last year. Of the total, Rp 26.5 trillion were raised through share issues and Rp 6.7 trillion through bond flotations.
The Jakarta Stock Exchange now lists 223 companies.
He said the economic growth, which is expected to reach another robust rate of at least seven percent this year, will also support the bullish sentiment on the stock exchanges.
The country's economic growth increased from 6.5 percent in 1993 to seven percent last year and is expected to reach seven percent in each of the coming years. (fhp/vin)