Proposed bourse merger still up in the air
Proposed bourse merger still up in the air
JAKARTA (JP): The planned merger between PT Bursa Parallel
Indonesia (BPI), the company which manages the over-the-counter
stock market in Jakarta, and the Surabaya Stock Exchange (SSE) is
still up in the air.
Bambang Subianto, chief commissioner of BPI, told journalists
after BPI's shareholders' meeting here yesterday that the
shareholders had given the team appointed to prepare the merger
60 days to do the job.
"If the team cannot form the merged market within 60 days, it
should report and return the mandate to the shareholders," said
Bambang, who is also director general of financial institutions
at the Ministry of Finance.
Asked about the holdup in the planned merger, Bambang said a
number of matters still needed clarification, especially the
relationship between the planned merged market and the Jakarta
Stock Exchange (JSX).
He said BPI would prefer the relationship to be complementary,
meaning that the merged market would serve small and medium-sized
companies and act as a bridge for those wanting to list on the
JSX.
However, informed sources at the JSX said that the JSX wanted
its relationship with the merged exchange to be one of open
competition.
The sources said if the JSX accepted BPI's proposal that the
two bourses have a complementary relationship, the JSX would have
to transfer dozens of its clients, especially those categorized
as small and medium enterprises with a paid-up capital of less
than Rp 50 billion (US$22.5 million) to the merged market.
Bambang said that the slow progress of the merger plan had a
lot to do with the JSX factor.
"We're is still waiting for the JSX's formal response to our
proposal," Bambang said, adding that the proposed complementary
relationship between the new merged market and the JSX would
include trading activities.
In fact, BPI and the JSX already have a complementary
relationship in trading activities. Yesterday BPI started trading
odd lots -- lots of less than 500 -- of shares which are listed
on the JSX because most transactions on the JSX are carried out
in trading units of, at least, 500 shares.
No problem
BPI president Tito Sulistio said the handling of the JSX-
listed odd lot share trading was no problem for the BPI, since
transactions at that bourse are carried out in a trading unit of
100 shares.
BPI was established in late 1990 by the Association of
Money and Securities Traders as the first over-the-counter
capital market in the country.
The SSE was formed in 1989 as the first privately-owned stock
market in the country and the only stock market located outside
Jakarta.
However, trading activities on the two exchanges have been
sluggish as both investors and share issuers continue to favor
the JSX.
Bambang said that if the JSX agreed with his company's
proposal for a complementary relationship, there would,
practically, be one capital market in Indonesia with two
operating companies.
"Our proposal for a complementary relationship is actually
aimed at making the market efficient: shares will be more liquid
and the formation of stock prices will represent the real
condition of the companies," Bambang said.
However, if the JSX rejects the proposal, Bambang said, BPI
and the SSE should rethink their merger plan. "If eventually we
decide to merge and enter into competition, it has to be fair
competition."(rid)