Jakarta, Oct 9 (ANTARA) - The Indonesian government has called on state-owned enterprises (SOEs) to buy back their shares in an effort to restore public confidence in the Indonesian Stock Exchange (BEI) where trading was suspended for two days (Wednesday and Thursday) as a result of the impact of the global financial crisis.
Besides calling for the SOEs to buy back their shares at BEI, the government also asked the stock market authority to revise regulations in order to ease the buy-back process.
State Enterprises Minister Sofyan Djalil said all state and public companies in possession of adequate funds had been asked to buy back their shares in the stock market.
"The funds for the buybacks should come from the companies' internal sources. They can buy back more than 10 percent but less than 100 percent (of their shares)," he said.
The minister made the remark after a meeting with President Yudhoyono at the Presidential office in the wee hours on Thursday to discuss the temporary suspension of trading at the Indonesian stock market.
Trading on the Indonesian Stock Exchange was suspended on Wednesday and Thursday as the market became irrational causing the main index to plummet more than 10 percent by mid-morning on Wednesday.
Sofyan said that SOEs which were instructed to buy back their shares in the stock market included PT Semen Gresik, PT Bukit Asam, PT Timah, PT Aneka Tambang and PT Perusahaan Negara (PGN).
"PT Telkom has implemented the program," the minister said.
He said that in order to carry out the buy-back program, his ministry would coordinate with the Capital Market Supervisory Board (Bapepam).
The coordination is intended to allow Bapepam to ease its regulation and shorten the issuance of a license for a buy-back from 30 days to seven days.
"We will discuss it so that Bapepam would draw up a special rule which will allow an extra-ordinary shareholders' meeting to be held without the need to wait for 30 days," he added.
In the meeting which was also attended by executives of SOEs and Bank Indonesia (BI/the central bank), the president also asked all SOEs to carry out financial sector policies based on programs laid down by the government.
"Thus, SOEs will not conduct speculative foreign exchange buying because to buy one they have to coordinate with BI and the state enterprises ministry," Sofyan said.
Head of the Capital Market - Financial Institutions Supervisory Board (Bapepam-LK), Darmin Nasution, meanwhile said his institution would also revise regulations which were related to share buybacks on the stock market.
"The buyback regulation will be slackened, for example, a buy-back plan could be carried out without the need to pass through a shareholders' general meeting. The percentage restriction on the number of shares that could be bought back will also be revised," Darmin said.
In the meantime, BEI President Director Erry Firmansyah who was also present at the meeting said that his side would revise a number of regulations in an effort to provide spacious rooms for market players to carry out better transactions.
The same matters were also raised by head of Bapepam-LK's Bureau of Law and Legislation Robinson Simbolon. He said that his side would ease a number of regulations on stocks market.
He said that the restriction where issuers could only buy back 10 percent of their shares was likely to be revised. Its percentage would be increased. But he did not mention how many percent.
"The number of shares which can be bought back initially was 10 percent but we will increase it. It's still being worked out and will be announced later," he said.
He said the volume of shares that can be bought back would be up to 50 percent.
The buyback process would be shortened to seven days and company managements can carry out buybacks without first seeking the approval of shareholders' meetings but must make disclosures later, he said.
The regulation would be effective as soon as trading at the Indonesian Stock Exchange is resumed, he said.
Market players have positively responded to the plan of SOEs and public companies to buy back their shares in the stock market.
Investors have raised concern about the uncertain conditions of the stock market, fearing that the value of their portfolio investments would drop, thus bringing losses to them.
Yet, the plan of state and public companies to buy back their shares has reduced the investors' concern.
"In the current unclear economic conditions, buybacks are needed to maintain the interest of investors. With the easing of regulations on stocks market, we hope that issuers, including SOEs would soon buy back their shares in the market," President Director of publicly listed state-owned gas distribution PT Perusahaan Gas Negara Tbk (PGAS), Hendy P. Santoso, said. (T.A014/A/HAJM/20:05/H-YH) 09-10-2008 21:12:39
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