Trading unit of bank stocks to increase to 5,000 shares

JAKARTA (JP): The Jakarta Stock Exchange (JSX) will raise the trading unit (lot) of bank shares to 5,000, from the current 500. to improve efficiency, the exchange's executive said on Friday.

Head of trading division Yohanes Liaw said the new trading lot would be effective from Monday.

He emphasized that implementation of the 5,000-share trading unit would not interfere with other regular non-bank shares, which would continue to trade on the 500-share trading lot.

"Other shares will be traded as usual, while shares in the banking sector that are still in the 500-share trading units will be traded in the odd lot market until they are gradually replaced with the 5,000-share trading units when they go through trading settlement," Yohanes said.

Yohanes said the increase of the trading unit to 5,000 shares was made to maintain efficiency in shares administration amid a significant increase in the volume of shares on the JSX.

"We had a significant increase in the number of bank shares following the rights issue of recapitalized banks," he said.

At least four of 21 publicly listed banks, which joined the government-sponsored recapitalization program, issued billions of rights shares to raise funds to partly finance their recapitalization. The other banks will issue their rights shares by the end of the year.

Yohanes said one bank under the recapitalization program, for example, had issued over 200 billions of rights shares.

He said the huge volume of shares was burdening parties to keep the shares in custody, since it would take up a large amount of room space.

Back-office work and other handling fees for the abundant shares during trading activities created additional burdens, he added.

"The increase from 500 to 5,000 shares per trading unit, at least for shares in the banking sector, will help ease the burdens, since it reduces the number of shares physically," he said.

However, Yohanes said the problems would cease once JSX implemented the scripless trading system in March next year. (udi)