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Exit of foreign brokers not reflecting RI market performance
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A man passes the iconic round table on the trading floor of the Indonesia Stock Exchange. (thejakartapost.com/Wienda Parwitasari)
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s foreign brokerage Merrill Lynch decides not to resume trading on Indonesia's bourse and Deutsche Bank securities branch here may do the same, questions abound about if this says anything about the domestic capital market's performance.
Market players, however, are quick to rebuff any negative sentiment, saying the local stock market would continue to perform strongly relative to other markets in the world and that the decision to stop stock trading in Indonesia reflects a global restructuring of their multinational securities.
The Indonesia Stock Exchange (IDX) officially revoked PT Merrill Lynch Sekuritas Indonesia’s brokerage permit on Monday following the company’s announcement it would close its stock trading business in the country. The firm no longer has a brokerage seat to trade stocks on the Indonesian bourse and has been removed from the IDX’s list of operating brokerage firms.
Deutsche Sekuritas Indonesia may also withdraw its stock trading business from the local bourse as part of its global restructuring, said IDX trading director Laksono Widodo. Nomura Sekuritas Indonesia remains active despite media reports of a planned exit from the local bourse as well, said IDX president director Inarno Djajadi.
“I’m sure they will re-open their offices here soon,” Indonesian Securities Companies Association (APEI) chairman Octavianus Budianto told The Jakarta Post, adding that he has yet to receive notifications from any of the three brokerages to revoke their memberships.
Withdrawal of foreign brokerage firms is nothing out of the ordinary, he said, noting that several firms had closed their branches in Indonesia but then re-opened their offices not long after.
Merrill Lynch Sekuritas Indonesia, one of the first foreign brokerages to open a branch in the country in 1994, exits the local bourse as part of the company’s restructuring, as its parent company, the Bank of America, has decided to drop Merrill Lynch from its investment-bank brand.
