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Indonesia Stock Exchange Seeks to Double Market Value (Update1)

By Berni Moestafa and Widya Utami

June 25 (Bloomberg) -- The Indonesia Stock Exchange aims to double the market’s value in three years by luring local units of companies such as Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp., the bourse’s newly elected president said.

The exchange also will try to entice more state-run companies to list shares on the Jakarta exchange, said Ito Warsito, who will start a three-year term July 1, replacing Erry Firmansyah.

“We are targeting the size of market capitalization to attract foreign investors so that the Indonesian bourse stays within their radar,” Warsito, 47, said yesterday in an interview in Jakarta.

Indonesia, whose $433 billion economy is Southeast Asia’s biggest, has a stock market value of $146 billion, less than half the size of Singapore’s. The benchmark 383-share Jakarta Composite index rose 1.7 percent to 2,029.71 as of 11:06 a.m. local time. It has gained 50 percent this year, Southeast Asia’s top performer and the fifth-best worldwide, according to data compiled by Bloomberg.

The gauge rose as the victory by President Susilo Bambang Yudhoyono’s party in parliamentary elections in April bolstered his reelection chances in July. Yudhoyono presided over reforms that led the economy to expand more than 6 percent in the past two years, the fastest since the 1997 Asian financial crisis.

Three companies went public in Indonesia so far this year, compared with 18 last year, data compiled by Bloomberg showed.

‘Won’t Be Easy’

Phoenix-based Freeport, the world’s biggest listed copper producer, runs a copper and gold mine in the Papua province. Mindo Pangaribuan, a spokesman at the local unit, PT Freeport Indonesia, declined to comment. Newmont, which owns a 45 percent stake in Indonesia’s second-largest copper mine, said last year it may sell shares in its unit through an initial public offering. Rubi Purnomo, a spokesman for the Greenwood Village, Colorado-based Newmont in Indonesia, wouldn’t comment.

“It won’t be easy getting these companies listed by using a persuasive approach only,” said Fadlul Imansyah, a fund manager at Jakarta-based PT PNM Investment Management, which overseas about $173 million in assets. “And the problem is whether this can become a priority for the new government.”

Warsito, who graduated with an MBA from Harvard Business School in 1994, managed the 1995 initial share sale for PT Telekomunikasi Indonesia as investment banking director at PT Danareksa Sekuritas. Telekomunikasi, the country’s biggest phone company, is also the largest by market value.

“I have the experience,” Warsito said. “I know the process, I know the difficulties.”

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net; Widya Utami in Jakarta at wutami@bloomberg.net

Last Updated: June 25, 2009 00:47 EDT
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