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History of Indonesian
Capital Market In the Indonesian Capital Market history, shares and bonds trading has begun since the 19th century. According to book Effectengids published by Verreniging voor den Effectenhandel in 1939, stocks trading has occurred since 1880. On December 14, 1912, Amserdamse Effectenbueurs established a stock exchange branch in Batavia. In Asia, the exchange was the 4th established after those in Bombay, Hong Kong, and Tokyo. Colonial Period In the early of 19th century, the colonial government of Netherlands started developing plantations in Indonesia. As sources of funding were Netherlands and Europeans depositors, who at that time, had far much income than the natives. Based on the purpose for developing the plantations, the colonial government established capital market. After some preparations, on December 14, 1912 a capital market located in Batavia (Jakarta) was officially established named Vereniging voor de Effectenhandel (stock exchange) and the trading was started at the same moment. At the beginning there were 13 active members, i.e. Fa. Dunlop & Kolf; Fa. Gijselman & Steup; Fa. Monod & Co; Fa. Adree Witansi & Co.; Fa. A.W. Deeleman; Fa. H. Jul Joostenz; Fa. Jeannette Walen; Fa. Wiekert & V.D. Linden; Fa. Walbrink & Co; Fa. Vermeys & Co; Fa. Cruyff and Fa. Gebroeders. The stocks traded were shares and bonds of Netherlands firms/plantations in Indonesia, bonds issued by the government (provinces and municipals), securities certificates of American companies issued by the administrative offices in Netherlands, and of other the Netherlands firms. The development of the exchange was so fast that attracted the interest of other regional societies. To accommodate the situation, on January 11, 1925 in Surabaya and on August 1, 1925 in Semarang, two exchanges were officially established. The members of exchange in Surabaya were: Fa. Dunlop & Koff, Fa. Gijselman & Steup, Fa. V. Van Velsen, Fa. Beaukkerk & Co, and N. Koster. The members in exchange in Semarang were: Fa. Dunlop & Koff, Fa. Gijselman & Steup, Fa. Monad & Co, Fa. Companien & Co, and Fa. P.H. Soeters & Co. The growth of the exchanges was so pleasing indicated by the listed stock value that reached NIF 1.4 billion (compared to subsidized rice price in 1982, the value was about 7 trillion) from 25 kinds of stocks. World War II Period Early 1939 the political situation in Europe was heating up. To deal with the situation, the Netherlands-Hindie government decided to centralize the stock trading in Batavia and closed the exchanges in Surabaya and Semarang. However, on May 17, 1940 the entire stock trading was closed and a rule was issued stating that all stocks ought to be deposited in banks appointed by the Netherlands-Hindie government. The liquidation of the three stock exchanges spoiled the stocks liquidity, caused difficulties to the stock owners, and caused the closing of broker-dealer offices and the discharging of many employees. It also caused many companies and individuals unwilling to invest in Indonesia. It can be said that the World War II indicated the ending of the Indonesian capital market activities in Colonial period. > Old Order Period > New Order Period > The Founding of Bapepam > The Chairmen of Bapepam
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