SSE, BPI to meet on merger plan
SSE, BPI to meet on merger plan
JAKARTA (JP): The Surabaya Stock Exchange (SSE) and the over- the-counter market, Bursa Parallel Indonesia (BPI), will soon hold extraordinary meetings of their respective shareholders to decide their merger plan.
Executives of the two exchanges said over the weekend that details on the plan of trading unification would also be discussed during the meetings.
SSE's president, Basiruddin A. Sarida, described the shareholders' meetings as merely formality as both stock markets have reached a firm commitment to giving a positive response to the government's unification proposal.
The government proposed recently the unification of the Surabaya-based SSE and BPI in Jakarta to improve trading liquidity and efficiency.
Chairman of the Capital Market Supervisory Agency (Bapepam) Bacelius Ruru said that such unification should be carried out before June.
BPI was established in late 1990 by the association of money and securities traders as the first over-the-counter (parallel) market in the country.
Its operation, however, has not been so successful and most share issuers still prefer listing their stocks on the Jakarta or Surabaya Stock Exchanges. The number of companies listed on the parallel market is less than 10.
The SSE was established in 1989 as the first privately owned stock market in the country and the only stock market located outside Jakarta.
Its operation relied much on the government's listing policy, requiring share issuers to list their shares on both Jakarta and Surabaya markets during its early operation.
The double listing facility was thwarted following the privatization of the Jakarta stock market in 1992.
Trading on the Surabaya market is also not so active and most of its share transactions take place in its Jakarta branch.
Basiruddin said that the unified stock exchange will be based in Surabaya while its transaction activities would be allowed in the exchange's branches.
He said that the unified stock exchange will adopt an electronic trading system used by NASDAQ, the U.S. over-the- counter stock market.(hen)