Parallel stock market needs to offer incentives

JAKARTA (JP): The parallel or over-the-counter (OTC) capital market needs to offer incentives to attract more investors, an executive says.

The president of PT Jasereh Utama, J. A. Sereh, said yesterday that companies listed on the parallel market, for example, could offer cash dividends of no less than 40 percent of after-tax profits to attract investors.

Speaking at a seminar on "alternative financing here, Sereh said that large scale investors usually prefer to make deals on the Jakarta Stock Exchange (JSX) and Surabaya Stock Exchange (SSE) but small and medium scale investors would go to the OTC.

If the companies listed on the OTC promised to pay dividends of no less than 40 percent, pension funds would likely also be interested in investments at the OTC.

Tito Soelistio, the president of PT Bursa Parallel Indonesia, the company managing the OTC, acknowledged that most investors are not interested in making investment on the parallel market due to lack of regulations, including those on delisting and sanctions against violators.

"Furthermore, companies listed on the OTC are not as qualified as those listed on the JSX and SSE," he said.

Five companies have listed their shares and 10 other listed bonds on the parallel market.(icn)