Shareholders back OTC's merger with SSE
Shareholders back OTC's merger with SSE
JAKARTA (JP): Shareholders of the over-the-counter (OTC) market company Bursa Paralel Indonesia (BPI) have given the green light for its merger with the Surabaya Stock Exchange (SSE).
Bambang Subianto, BPI's chief commissioner, said that the shareholders agreed in a special meeting here on Friday evening to form a special team to prepare the merger plan.
The team, which will be made up of five members representing the exchange's member companies and supervisory and executive boards, will be chaired by Tito Sulistio, BPI's president.
"We hope the merger with the Surabaya stock market can be realized in June," he told newsmen following the shareholders' meeting, which was attended by other commissioners, including James T. Riady, J.A. Sereh and Abdulrachim.
Tito said that the unification of BPI and the Surabaya stock market is expected to make stock trading in the country more efficient.
"The trading activities on the stock exchanges in the country are expected to be more complimentary to one another," he said.
BPI was established in late 1990 by the association of money and securities traders as the first over-the-counter market in the country.
Its operation, however, has not been very successful because most share issuers still prefer listing their stocks on the Jakarta or Surabaya exchanges.
The SSE, which was established in 1989 as the first privately owned stock market in the country and the only bourse located outside Jakarta, is relatively more active than BPI. SSE's early operation was much assisted by the government's double listing policy, which required share issuers to cross list their shares on both the Jakarta and Surabaya stock markets.
The abolishment of the double-listing policy following the privatization of the Jakarta stock market in 1992 almost jeopardized the Surabaya market until the government offered to lobby with share issuers to maintain their listing on the Surabaya market.
Share issuers' cross listing on the Jakarta and Surabaya markets is not based on a business consideration as most of the cross listing is made merely to meet the government's appeal, say analysts.
"Such a consideration is understandable," one of the analysts said. "Most trading activities on the Surabaya stock market, therefore, are done at its Jakarta branch."
"Shares traded on the Surabaya stock market are all listed on the Jakarta exchange. So it is not necessary to go to Surabaya to buy stocks," he added.
Tito said that the preparations for the merger would also include the organizational restructuring of the two bourses and the selection of a new headquarters of the unified market. (hen)