T

he Indonesian Stock Exchange (IDX) will organize a business incubator program to help the country’s start-ups develop their businesses so that they are eligible to float their shares on the stock market.

IDX president director Tito Sulistio said the start-ups taking part in the incubator program would receive management and marketing advice as well as training about how to prepare financial reports.

“For start-up companies, the problem lies within themselves. Often, startups only think of raising capital for a particular project, without taking a closer look at how to leverage the money generated from the project for future expansion,” Tito said on the sidelines of an event to commemorate the bourse’ 39th birthday on Sunday.

IDX will team up with state-controlled lender Bank Mandiri to hold the incubator program, which consists of various workshops, such as legal and accounting consultations.

At least 30 start-ups are expected to participate in the program, which is likely to be held next month and is one of the bourse’ gambits to draw more companies to list their shares on the stock exchange.

Separately, Financial Services Authority (OJK) commissioner for the stock market Nurhaida, who also attended the event, told The Jakarta Post that the regulator expected technology-based start-ups to participate in the incubator program.

Technology-based startups, such as online shops and financial service providers, are currently burgeoning in Indonesia, the world’s fifth most active country in terms of Internet usage, with 100 million users.

A number of companies, such as mobile-based ride-hailing app Go-Jek, e-commerce stores Bukalapak and Tokopedia, as well as online travel agent Traveloka, commenced their ventures as start-up companies and have now managed to scale up their businesses thanks to financing from foreign backers.

In the program, the IDX will mediate meetings between startups and potential investors — notably venture capitalists to help them increase their capital — and notaries to help them to prepare legal documents and administrative requirements for their initial public offering (IPO).

Tito said the bourse was currently luring more companies to float their shares on the exchange in order to further their market capitalization, which reached Rp 5.38 quadrillion as of June.

“We reached an all-time high of Rp 5.9 quadrillion in July,” Tito said.

Apart from encouraging companies to hold an IPO, Tito said that the bourse would open access for companies that have been delisted from the stock market in a bid to increase their market capitalization.

IDX June monthly data show that there are 529 companies listed on the bourse. Meanwhile, daily transactions in the stock exchange averaged Rp 5.6 trillion per day in the first six months of the year.

Contacted separately, Investa Saran Mandiri analyst Hans Kwee lauded the bourse’ move, saying that many companies, including start-ups, had found it difficult to complete the legal and financial documents required to enter the bourse.

He added that the OJK should consider creating a regulation that would set several requirements to determine which start-ups could be listed on the bourse.

“There should be a limitation on investors’ accounts, given that many start-ups, which are new companies, are prone to post losses as their businesses are still unstable,” Hans said. (mos)