TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Editorial: Bakrie and WMD

  • The Jakarta Post

Jakarta   /   Mon, October 20 2008   /  11:24 am

Shares in the Bakrie Group of Companies listed on the Indonesian stock exchange are almost like weapons of mass destruction (WMD) for the local market. And therefore, they require careful treatment by the authorities, lest they explode and burn everyone else in the market. But no bailout, please. How Bakrie shares have become WMD in the local market is down to the group's sheer size, the super-active trading of its shares, and the majority -- if not all -- of brokerage firms that are exposed to Bakrie. Also, there are so many investors speculating on Bakrie, including using margin facility from their stockbrokers. Thus when authorities suspended trading in Bakrie shares on Oct. 7 -- one day before they suspended all trading on the bourse -- so many people were affected. When liquidity is especially scarce, like now, having stocks that cannot be traded in the market is lik...