Bapepam-LK signs deal with Iranian counterpart on sharia cooperation

The Jakarta Post, Jakarta

Indonesia's Capital Market and Non-Bank Financial Institution Supervision Agency (Bapepam-LK) and the Securities and Exchange Organization of Iran (SEO) signed an agreement on Monday to enhance bilateral cooperation, especially in the sharia stock market.

"We're still behind on the development of sharia products. With this agreement I hope there will be some exchange of trainings on the development of sharia products," Bapepam-LK Fuad Rahmany said at the signing ceremony.

He said that mutual cooperation with Iran would be good for Indonesia in terms of developing its sharia market, as Iran's sharia market enjoys total capital of US$50 billion and an average price to earnings ratio of five.

Besides cooperating on the sharia sector, the two countries would also exchange training, information and know-how in order to develop institutional capacity and better regulate and supervise their stock markets.

He said the cooperation with Iran fit within the framework of the International Organization of Securities Commissions, a worldwide association of national securities regulatory commissions.

Djoko Hendratto, head of Bapepam's bureau of investment, said Monday's memorandum of understanding was expected to open up possibilities for each of the two countries to list companies on the other's stock exchange.

Dual listing allows a company to list its shares on more than one stock exchange to improve the liquidity of shares and give investors more trading alternatives.

Erry Firmansyah, head of the Indonesia Stock Exchange, said the exchange had finished drafting a regulation on dual listings and would submit it to Bapepam-LK this week for approval.(ndr)