New Stock Exchange Boss Faces High Expectations
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Indonesia’s Financial Services Authority, or OJK, has approved Inarno Djajadi as new president director of the Indonesia Stock Exchange.
The appointment will be effective after the bourse’s general shareholders meeting on June 29. Inarno, who will serve during the 2018-21 period, replaces Tito Sulistyo who was holding in office in 2015-18.
Issuers, investors and analysts have high expectations toward the new Indonesia Stock Exchange (IDX) leadership.
“It [the stock exchange] needs more derivative products and exchange traded funds [ETF] to deepen the capital market. So far, derivative trading on IDX has not been doing too well,” said Investa Saran Mandiri director Hans Kwee.
Hans said the new IDX director should begin to think of a new regulation that would allow securities companies or third parties to act as liquidity buffers on the market to prevent issuers, who have just held an initial public offering, from seeing their stock prices fall steeply.
“If our capital market is good and growing, then entrepreneurs and investors will have the confidence to make IDX the place to raise funds or to invest,” he said.
Isakayoga, director of the Indonesian Issuers Association (AEI) said the bourse needs to reduce its annual listing fees.
“Do not calculate the annual fee based on market capitalization, but based on total assets. Today, the higher the stock price, the higher the listing fee will be, as if the issuer was penalized for it. Instead, he should be rewarded,” said Isakayoga.
According to the Indonesian Securities Analysts Association (AAEI), which members serve more than 1.3 million individual investors, the new IDX director should focus on good corporate governance.
“Issuers on IDX need to be more transparent, especially to analysts. There are still many companies that are difficult to get in touch with,” said AAEI chairman Edwin Sebayang.
Inarno has extensive expertise in capital markets. The Gadjah Mada University graduate began his career as a treasurer at local lender Uppindo Bank in 1989. Since then, his career has been centered on brokerage firms and the stock market. In 1991-97, he was serving as director of Aspac Upindo Sekuritas, after which he moved to Mitra Duta Sekuritas, Widari Securities, Madani Securities, Maybank Kim Eng Securities and CIMB Sekuritas Indonesia. He served as chief executive of the Stock Market Clearing House (KPEI) in 2003-09.
Aside from Inarno, OJK also appointed six other directors.
President director: Inarno Djajadi
Listing director: IGD N. Yetna Setia
Trade director: Laksono Widito Widodo
Monitoring transaction director: Kristian Sihar Manullang
IT director: Fithro Hadi
Human resources and finance director: Risa Effennita Rustam
Development director: Hasan Fawzi
Questions & Answers
Q.What key areas do market participants expect the new IDX director to focus on?
What key areas do market participants expect the new IDX director to focus on?
Issuers, investors, and analysts expect the new director to deepen the capital market with more derivative products and ETFs. They also hope for new regulations to prevent sharp stock price falls for newly listed companies and a reduction in annual listing fees.
Q.What specific changes do issuers want to see regarding annual listing fees?
What specific changes do issuers want to see regarding annual listing fees?
The Indonesian Issuers Association suggests annual listing fees should be calculated based on total assets, not market capitalization. They argue that high stock prices should not lead to higher fees, as this penalises successful issuers.
Q.What is the primary concern for analysts regarding corporate transparency?
What is the primary concern for analysts regarding corporate transparency?
Analysts are concerned about the lack of transparency from many companies listed on the IDX. They wish for easier communication with issuers, especially for analysts representing over 1.3 million individual investors.
Q.What experience does Inarno Djajadi bring to his new role?
What experience does Inarno Djajadi bring to his new role?
Inarno Djajadi has extensive capital markets expertise, having worked in brokerage firms and the stock market since 1989. He previously served as chief executive of the Stock Market Clearing House from 2003 to 2009.
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