Surabaya bourse and Nasdaq sign MOU
Surabaya bourse and Nasdaq sign MOU
JAKARTA (JP): Nasdaq International Market Initiative (NIMI) of
the United States agreed here yesterday to help the Surabaya
Stock Exchange improve its trading.
Under a memorandum of understanding signed by Nasdaq senior
associate Michael J. Kulczak and the exchange's president
Isakayoga CH, NIMI will provide technical assistance to improve
the exchange's trading system.
Isakayoga said NIMI -- a subsidiary of Nasdaq, the New York-
based over-the-counter market -- would introduce a market making
system at the exchange.
"We hope the new system will be able to improve the liquidity
of the market," he said after signing the memorandum.
The Surabaya exchange was established in 1989 as the first
privately-owned stock market in the country, and the only stock
market outside Jakarta.
The exchange lacks liquidity because investors prefer to trade
shares through the Jakarta Stock Exchange. Most shares listed on
the Surabaya exchange are also traded on the Jakarta exchange.
The Surabaya exchange took over the country's Bursa Paralel
Indonesia, the country's only over-the-counter market, last year
to improve its market base. But liquidity remains a problem even
though the exchange uses a combination of auction and market
making systems.
Kulczak said the memorandum would help the Surabaya exchange
move from being a small-dealer market to a national-dealer
market.
NIMI's technical assistance will include trading strategies,
training programs and consistent monitoring mechanisms for market
makers on a day-to-day basis, Kulczac said.
NIMI will also be able to help Indonesian listed companies
seek a dual listing on Nasdaq and other U.S. stock markets, he
said.
NIMI will provide information on the listing requirements that
Indonesian companies must meet to float their shares on Nasdaq or
the New York Stock Exchange.
On accounting and disclosure procedures, Kulczac said,
Indonesian companies could seek assistance through Nasdaq
International Limited, like Tri Polyta and Inti Indorayon which
are already listed on Nasdaq.
Indonesian companies will be able to list on the Surabaya
exchange before listing in the United States, he said.
Isakayoga said NIMI was expected to provide technical
assistance to encourage small and medium companies to float their
shares on the Surabaya exchange.
Nasdaq, established 1971, has grown from an over-the-counter
market to the most active screen-based trading market in the
world, with 800 million shares traded daily, he said.
Kulczak said his company would work with the exchange to
assess business plans and existing business technology systems
next January. (01)