Indonesia Needs More Listed Companies Ahead of AEC in 2015, OJK Says
May 15, 2014 Leave a comment
Indonesia Needs More Listed Companies Ahead of AEC in 2015, OJK Says
By Yohanes Sirait on 06:47 pm May 05, 2014
- Indonesia needs to have more listed companies on the local bourse in anticipation of the advent of the Asean Economic Community at the end of 2015, according to Rahmat Waluyanto, the deputy chairman of Indonesia’s Financial Services Authority.
“Indonesia’s capital markets must be prepared, so that when the AEC is implemented, they will be ready to compete with other markets in other Asean countries,” Rahmat said in his keynote speech at a discussion in Jakarta on Monday on how Indonesia’s capital market would respond to the regional economic integration.
Under the AEC blueprint, capital market regulators from the bloc have agreed to interlink their markets by 2015, in a move that, should it proceed successfully, may account for 15 percent of the world’s market capitalization.
There are already three exchanges in Asean (Malaysia, Singapore and Thailand) that have been connected via a single trading platform — the Asean Linkage — giving investors access to the stocks of all the companies listed in those countries.
Indonesia, the Philippines and Vietnam are not linked yet.
Rahmat cited a number of challenges Indonesia faced to compete with its regional rivals.
He said there were only 489 listed companies on the local bourse, with a combined market capitalization of Rp 4,822 trillion ($475 billion), a number that falls far below those of neighboring countries that have smaller economies.
In Malaysia, there are already 906 listed companies, while in Singapore, there are 767 listed companies.
Rahmat said investors had actually been betting on the potential gain in Indonesia’s index, having seen strong upside for its benchmark stock index this year compared to regional rivals.
“For the year to date, the [benchmark] Jakarta Composite Index gained 13.21 percent, while in Malaysia the index gained only 0.11 percent, in Singapore it gained 2.69 percent and in Thailand 9.45 percent. Only the Philippines is performing better, with an increase of 14.48 percent,” he said.
Rahmat said his office, known as the OJK, was encouraging state-owned companies, private companies and small and medium enterprises to list their shares on the IDX.
Other than that, the OJK will also make efforts to boost the number of local investors.
According to data from the IDX, as of April 2014 there were only 427,498 retail investors active in the financial markets, representing less than 2 percent of the country’s population.
About bambooinnovator
Bamboo Innovator 