Ten brokerage firms leave JSX
Rendi A. Witular, The Jakarta Post, Jakarta
The Jakarta Stock Exchange (JSX) said on Tuesday that ten local brokerage houses had decided to quit the local bourse because of their inability to meet the new working capital requirements.
JSX president Erry Firmansyah said the bourse's new regulation obliged brokerage houses to have a minimum of Rp 10 billion (US$1.2 million) in working capital by December.
The previous ruling required brokerage firms to only have a minimum of Rp 5 billion in working capital.
"There are 10 members (brokerage houses) of the JSX that have decided to pull out because of the regulation. But for now I cannot give the names of the companies," said Erry during a press briefing.
He said the JSX would monitor other brokerage houses up until the Dec. 1 deadline to make sure they complied with the new regulation.
He explained that the JSX would limit the transaction volumes of brokerage houses if they failed to meet the deadline. The bourse would only allow the companies to conduct transactions worth no more than five times their working capital.
The JSX would give another grace period up until Dec. 23 for the companies to comply with the regulation or risk being banned from trading.
Elsewhere, Erry said the JSX projected that by the end of this year average daily transactions would reach Rp 500 billion with the Jakarta Composite Index expected to stand at between the 600 and 650 levels.
Thus far, daily average transactions on the bourse stand at around Rp 473 billion with the Index averaging around 630 points.
He said the JSX would try to support the recent surge in the index by preventing mischievous practices by recalcitrant speculators from undermining the shares, especially second liners.
The JSX's supervision director, Sihol Siagian, said that the JSX had found a number of cases where the prices of shares belonging to the certain second line companies had been pushed up significantly by speculators in order to attract other investors to join in the buying.
He explained that this would mislead investors as the surges in the shares did not reflect the true fundamentals of the companies.
He said that after the shares jumped to a certain level, the speculators would then unload their shares and leave those who bought their shares later to bear the losses.
If there were such indications, the JSX would immediately suspend the trading of the shares and warn investors through brokerage houses on the possibility of "dirty" speculation, said Sihol.
However, Sihol refused to name any companies that had or might become the victim of such practices.