VIVAnews – Head of the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) Fuad Rahmany reminded how vulnerable the state’s capital market is.
“Our capital market is dominated by foreign investors,” he said in Jakarta on Dec. 3.
Rahmany also said the foreign investors in Indonesia make up 40 to 45 percent of the market capitalization.
According to him, they could withdraw their money out of the market. “It will be [a] fluctuating [market],” he said.
To overcome the problem, Bapepam will now reinforce several policy revisions which tend to focus on customer and investor protection and the standard enhancement of capital market performer and non-bank financial institution qualifications.
Rahmany went on by saying that Bapepem has invited legal experts and capital performer associations such as the IDX to discuss the issue.
“We want the credibility and the efficiency of the capital market trading system set by the SRO [Self Regulatory Organization] to increase,” he said.
He also acknowledged the fact that through the implementation of the regulations, the government is expecting the numbers of domestic retails and long-term investors to escalate. “We’ll intensify capital market’s social and educational activities so that the domestic investors can expand their roles,” he said.
On December 1, IDX noted there are 407 registered companies with the market capitalization value of Rp 1947, 4 trillion or 39.9 percent worth of contribution from the national production.
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Translated by: Nataya Ermanti
