Susilo opens 2005 trading in quiet bourse

Rendi A. Witular, The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono made his first visit to the Jakarta Stock Exchange (JSX) on Monday to open trading for the new year while most brokers were still on holiday.

Prior to ringing the bell to mark the beginning of trading at 9:29 a.m. Jakarta time, Susilo urged capital market players to help support the reconstruction effort in Aceh and North Sumatra.

Escorted by Coordinating Minister for the Economy Aburizal Bakrie and Minister of Finance Yusuf Anwar, Susilo also spoke briefly on economic issues.

The President also held a discussion with capital market investors, analysts and brokers, relaying his concerns over the capital market watchdog. He said the unprofessional attitude of its officials had reduced investor confidence in the stock market.

"I have urged the Capital Market Supervisory Agency to be more professional in supervising the capital market and to uphold the law," he said, referring to Bapepam.

Last year, Bapepam took only one market violation to the Attorney General's Office.

Analysts believe the weak law enforcement is a result of spiraling graft practices at Bapepam, as companies being inspected or investigated by the agency often bribed its officials in exchange for lenient penalties.

Acting Bapepam chairman Darmin Nasution said the agency was undertaking efforts to become more professional and clean, particularly in reviewing capital market laws and regulations for loopholes that left an opportunity for fraud and backroom deals.

"Aside from speeding up the investigation into 22 capital market violations, we are also trying to revise a number of regulations to prevent certain parties from abusing them...," he said.

Trading remained thin on the JSX's first day of business, and the Jakarta Composite Index ended slightly higher by 0.644 points at 1000.877 with a volume of 460 billion shares worth Rp 584 billion (US$64.8 million).

Brokers attributed the slight increase on low buying and trading activities, as most investors and brokers were on leave and would be until next week.

"Trading was slow, but Susilo's short speech sent a positive signal to the market. The market will remain cautious over the government's concrete economic policies expected within the month," said a broker.

In his speech, Susilo underlined the government's intent to ensure a business climate conducive to investment by implementing good governance, ensuring social stability and security, establishing legal certainty, simplifying bureaucratic procedures and combating corruption.

He also warned that terror attacks, separatist movements and ethnic or religious conflicts could still occur this year, but that the government remained on high alert and would launch an all-out effort to mitigate any ensuing impacts on the economy.