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1998 Annual Report: 1998 in
Review The replacement of the leader followed by governmental cabinet changes did not affect the government’s commitment to create an orderly, fair, and efficient capital market, as stated in Capital Market Law No. 8 of 1995. In 1998 the trading volume in the Jakarta Stock Exchange (JSX) increased 18.3% from 76,6 billion shares in 1997 to 90.6 billion shares in 1998. On the other hand, total trading value declined 17.2% from Rp120.4 trillion in 1997 to Rp99.7 trillion in 1998, while the total trading value in Surabaya Stock Exchange (SSX) decreased from Rp10.7 trillion in 1997 to Rp3.1 trillion in 1998 or decreased 71%. In general, the decline was a result of the drop in most of the share prices. JSX Composite Index decreased 3.67 points, from 401.7 at the end of December 1997 to 398.03 at the end of December, 1998. The index fell to 256.8 points on September 21, 1998, the lowest point in 5 years since 1993. The highest point attained was 740.8 in 1997. The decline of the composite index was primarily due to the unstable Indonesian economic situation and the influence of regional stock exchange movements. The lower exchange trading value had a negative impact on the exchanges and exchange members’ performance in conducting their business activities. To alleviate the condition, Bapepam issued a policy to postpone the implementation of the rule of Net Adjusted Working Capital for Securities Companies which previously scheduled to be effective on December 1, 1998, to December 31, 1999. Another impact of the unstable economic situation is the delayed implementation of scripless trading and book-entry settlement. But this difficult condition has not reduce Bapepam’s efforts to develop the capital market. During 1998, Bapepam issued 20 new rules and revised 2 rules. The rules include the simplification and the improvement of the operation of pre-emptive rights, and disclosures regarding Issuers and Public Companies that are approaching bankruptcy. To implement government Regulations regarding Capital Market examination formal investigation procedures, Bapepam issued investigation guidelines regarding the procedures for dealing with violations in capital market. Bapepam also actively introduce new rules, and conducted computer training for the market participants in order for them to apply the new rules which need the computer technology. Bapepam encouraged market participants to enhance their capability both in corporate management and human resources areas. Through the Chairman, Jusuf Anwar , who is also Chairman of The Jakarta Initiative Task Force, Bapepam actively encourage the Issuers to restructure their debts.
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