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)