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Securities business growing.

Backgrounds

Securities business is a business which grows with capital market, therefore, when the capital market was hit by the global financial crisis, securities business floundered. A sharp fall of the composite index Composite Index

A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time. Also known simply as a "composite".
 (IHSG IHSG Indeks Harga Saham Gabungan (Jakarta composite) ) of the Indonesian Stock Exchange that came in the wake of the crisis brought about a setback in the business of securities companies.

The bond and share underwriting Underwriting

1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

2. The process of issuing insurance policies.
 business shrank shrank  
v.
A past tense of shrink.


shrank
Verb

a past tense of shrink

shrank shrink
 34.3% to Rp 1,675 trillion in from Rp 2,548 trillion in the previous year as a result of the devastating dev·as·tate  
tr.v. dev·as·tat·ed, dev·as·tat·ing, dev·as·tates
1. To lay waste; destroy.

2. To overwhelm; confound; stun: was devastated by the rude remark.
 global financial crisis in the last quarter of that year. However, the business has recovered quickly. In the first five months of 2009, the underwriting business already reached 2,148 trillion in value.

The period from the last quarter of 2008 and the first quarter of 2009, was a bad time for securities business. The capital market was hit by slump as the condition was not favorable fa·vor·a·ble  
adj.
1. Advantageous; helpful: favorable winds.

2. Encouraging; propitious: a favorable diagnosis.

3.
 since the end of the first quarter of 2008. Many companies postponed plan to go public. Meanwhile, the bond market was quiet. Few companies issued bonds and launched rights issue.

The country's capital market began to revive only in April and May 2009. The IHSG rose to almost 2000 points. The revival of the capital market means here is underwriting business, which is the bread and butter of securities companies.

Based on data at financial reports until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links  2008, there were 15 listed company reporting losses. Operating cost remained high especially labor cost. Under such condition, it was difficult for securities companies to maintain good performance. BNI BNI Business Network International
BNI Business Networking International
BNI Bank Negara Indonesia
BNI Bechtel National, Inc.
BNI British Nursing Index
BNI Barrow Neurological Institute (Phoenix, AZ) 
 Securities recorded a net loss of Rp 75.19 billion in 2008, as against a net profit of Rp 1.12 billion in 2007.

Meanwhile, many companies or prospective issuers cancelled plan to launch initial public offering and issue bonds. Business in underwriting, therefore, declined and income of securities companies dropped sharply in the wake of the global financial crisis. Only 17 companies launched IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard.  out of 30 planning in 2008. The 17 companies included Bank Ekonomi Raharja, BTPN (bank), Adaro Energy, Bayan Resources (coal mining), Bumi Serpong Damai (developer), Gozco Plantation (oil palm plantation), etc. Demands for the service of consultants to handle merger, acquisition and restructuring also fell sharply. Similarly business in investment management also was hit by slump.

Currently competition in the securities business is quite sharp. The number of underwriting companies are to many to split the business. Investors still active in the capital market are more selective in picking securities companies they rely more after the case of PT. Sarijaya, which was involved in the scandal Bank Century, which is taken over by the Deposit Insurance Company (LPS LPS - Sets with restricted universal quantifiers.

["Logic Programming with Sets", G. Kuper, J Computer Sys Sci 41:44-64 (1990)].
) by the end of 2008.

Number of securities companies

Currently, there are 121 companies operating in securities business including underwriters, brokers and investment managers. Among them 26 companies operate in all types of securities business, 48 companies operate as underwriters and brokers, 10 companies as brokers and investment managers and the rest handle only one of the types of business.

The competition in securities business is sharper under the present condition besetting be·set·ting  
adj.
Constantly troubling or attacking.

besetting
adjective chronic 
 the capital market. Currently securities business in the country is still controlled by foreign players. The number of foreign securities companies is much smaller but they control the largest share of the market. In 2008, seven foreign securities companies had a market share of 74%. In 2007, six foreign securities companies had a market share of 89%.

With the unfavorable condition of the capital market, the number of securities companies became too many. Therefore, the capital market watchdog BapepamLK called for merger among securities companies. Bapepam also plans to relax its regulation on net working capital minimum limit from Rp 25 billion to Rp 15 billion.

The market of securities underwriting down 34.3% in 2008

The market of bond and share underwriting in 2007 was valued at Rp 2.548 trillion or an increase of 48.9% from Rp 1.735 trillion in the previous year.

In 2008, the value fell 34.3% to Rp 1.675 trillion as a result of the global financial crisis. The unfavorable condition in the capital market forced a number of companies like PT Destinasi Tirta Nusantara Tbk, PT Hotel Mandarine Regency Tbk, and PT Adirasa Selaras Abadi Tbk to postpone listing on the capital market. Some companies also postponed and cancelled plan to issue bonds.

Based on data from Bloomberg, there were 53 securities including share and bonds issued in the first half of 2008, down from 74 securities in the same period in 2007. Among the 53 securities, 21 were issued in the second quarter of 2008 valued at Rp 7.15 trillion.

In the period of April-June 2008, three foreign securities companies dominating underwriting business were Citi and Deutsche Bank AG which handle the marketing of the shares of PT Indika Energy Tbk, which entered the capital market on June 11, 2008 and Calyon, which handled the marketing of the share of PT Bumi Serpong Damai Tbk and PT Gozco Plantation Tbk at the Indonesian Stock Exchange.

In the first half of 2007, Danareksa led in the market with a 15.9% share of underwriting market when it helped in the process of issuing 20 securities valued at Rp 5.07 trillion, but in the first half of 2008, it was relegated by PT Mandiri Sekuritas to the second position with a market share down to 10.9% valued at Rp 1.92 trillion.

In the first half of 2008, PT Mandiri Sekuritas led with a market share of 19.6%, handling the marketing of 23 securities valued at Rp 3.45 trillion. The subsidiary of Bank Mandiri Bank Mandiri (JSX : BMRI) is the largest bank in Indonesia in term of assets, loans and deposits. Total assets as of Q3 2006 were IDR 253.7 trillion (or USD 25.7 billion). It also has Capital Adequacy Ratio (CAR) of 23% (including market risk), Return on Asset (RoA) of 0.  already led in the first quarter of 2008 by underwriting securities valued at Rp 2.67 trillion.

In May 2009, the value of underwriting market surged again 28.2% to Rp 2,148.2 trillion with new companies launching IPO selling shares valued at Rp 1,517 trillion to the public and new corporate and government bonds issued valued at Rp 577.2 trillion.

Performances of securities companies

Losses recorded by 51 securities companies

In the wake of the global financial crisis, orders for bonds and share underwriting declined. Securities companies have to struggle hard to survive in sharp competition. Issuers choose securities companies which they think more effective and efficient in handling the process of issuing their securities. Underwriters, therefore, have to be more innovative in offering the securities to the public.

Dari total 121 securities companies grouped in BEI Bei (pā, bā), river, c.200 mi (320 km) long, formed by the union of two headstreams in the Nanling Mts., N Guangdong prov., S China. It flows S into the Xi River, E of Guangzhou, to form the Pearl River delta.  only 113 have submitted their 2008 financial report until May 2009. The remaining 8 companies had not published heir financial report on a number of reasons. Two companies were PT Sarijaya Permana Sekuritas and PT Signature Capital were suspended, 2 other companies PT Eurocapital Peregrene Securities and PT Antaboga Delta Sekuritas Indonesia had their membership revoked and 4 companies were not yet required to submit their financial report as their financial year began from Mach not from December. The four companies are PT Nikko Securities, PT Nomura Indonesia, PT Macquarie Capital Securities Indonesia and PT Waterfront Securities Indonesia.

In 2008, around 42% or 51 securities companies of the 121 securities companies grouped in BEI suffered losses, up from only 6 companies in 2007. Many of the companies had share and bond portfolio in issuers.

Profit of securities companies down

The Indonesian capital market until early 2009 faced negative sentiment, mainly in external factors. Internal factors such as falling value of the rupiah ru·pi·ah  
n. pl. rupiah
See Table at currency.



[Hindi rupay, rupiy
 added to the negative sentiments in the eye of foreign investors. As a result until end of 2008, the IHSG plunged to below 15,00 points with profit sinking during that period.

Based on financial report by September 2008, only 32 companies (26.67%) reported an increase in profit. The rest posted a decline.

According to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 data at the Biro Riset Infobank, the total profit of 120 securities companies per September 2008 shrank 84.50% to Rp 469.62 billion from Rp 3.03 trillion in the same period in the previous year.

There were 51 securities companies suffering loses by September 2008 and 69 other companies reported profit. Among those reporting profit only 32 companies posted an increase in profit from the same period in previous year. The other 37 companies posted a decline.

Ten companies reported the largest profit in the first nine months of 2008 were Danatama Makmur, CLSA CLSA Canon Law Society of America
CLSA California Land Surveyors Association
CLSA Contact Lens Society of America
CLSA Credit Lyonnaise Securities
CLSA Canadian Laboratory Suppliers Association
CLSA Cornell Law Student Association
 Indonesia, Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis.  Indonesia, Kim Eng Securities, Ciptadana Securities, Mandiri Sekuritas, Panin Sekuritas PT. Panin Sekuritas Tbk. (JSX: PANS) is a financial services company specializing in stock brokerage based in Jakarta, Indonesia. It was awarded the "Best Securities Company" in 2006 and 2007. , HD Capital, JP. Morgan Securities Indonesia, and Danareksa Sekuritas.

Ten companies recording the highest growth in profit in the first 9 months of 2008 were HSBC HSBC Hongkong and Shanghai Banking Corporation
HSBC Humane Society of Broward County (Florida)
HSBC Humane Society of Bay County (Bay County, Michigan) 
 Securities Indonesia, Jakarta Securities, Transpacific trans·pa·cif·ic  
adj.
1. Situated on or coming from the other side of the Pacific Ocean.

2. Spanning or crossing the Pacific Ocean.
 Securindo, Danatama Makmur, Bumiputera Capital Indonesia, Equity Securities Indonesia, Waterfront Securities Indonesia, CIMB-GK Securities Indonesia, Dhanawibawa Arthacemerlang, and Merrill Lynch Indonesia.

HSBC Securities Indonesia recorded the highest increase in profit with profit surging 13,974.91%. The high increase in the profit of HSBC Securities Indonesia was contributed by its business unit in corporate finance service, which reported an income of Rp 21,939.47 billion in the first nine month of 2008 up from zero in the same period in 2007. Business in arranging service, which earlier the core business of HSBC Securities Indonesia shrank from Rp 4,869.14 billion in the first nine month of 2007 to Rp374.06 million in the same period in 2008

Danatama Makmur posted the largest profit in the first nine months of 2008 growing 337.78% from the same period in 2007. In the first nine months of 2008, the company received big orders to handle corporate actions from the issuers of the Bakrie Group including PT Bumi Resources, Tbk.; PT Energi Mega Persada, Tbk. and PT Bakrieland Development, Tbk. In addition, Danatama succeed in launching IPO for PT Adaro Energy, Tbk. and PT Trada Maritime's.

The operating income Operating Income

The profit realized from a business' own operations.

Notes:
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit.
 of Danatama, therefore, surged to Rp 321.99 billion, including securities underwriting and sales Rp269.46 billion, fee from brokerage in securities transactions Rp 52.37 billion, financial advice service Rp 90 million and investment management Rp 75.69 million.

Merrill Lynch Indonesia recorded an increase of 207.54% in profit attributable mainly to fee from securities brokerage in the first nine months of 2008. The brokerage fee rose to Rp 147.26 billion. Its income from advisory service, however, fell to only Rp8.86 billion from Rp 21.54 billion in the same period in the previous year.

Meanwhile, 10 major securities companies recorded losses in the first nine months of 2008 include Inovasi Utama Sekurindo, Citi Pacific Securities, BNI Securities, Amantara Securities, Dinar Sekuritas, Aldiracita Corpotama, Tiga Pilar Sekuritas, Panin Capital, Finan Corpindo Nusa, and Dinamika Usahajaya. BNI Securities recorded an increase of 484.69% in come to Rp 802.18 billion. However, this subsidiary of Bank BNI suffered a net loss of Rp 75.19 billion, as against a net profit of Rp 1.12 billion in 2007. The less was attributed to operating cost.

In April 2008, the underwriting license of PT BNI Securities was suspended by Bapepam LK. According to the national rating company Perusahaan Pemeringkat Efek Indonesia (Pefindo), the suspension would have its effect at least on the quality of the company's credits, but the effect on securities brokerage business and investment management, which have been its main sources of income, would be insignificant. Pefindo, therefore, maintained the company's rating and Bond I 2007 of idBBB+. Pefindo also maintained the company rating of CreditWatch with negative implication in connection with company exposure of share repurchasing transaction with high risk. The ratings of PT BNI Securities were effective from 23 April 2008 to 1 April 2009

The three-month suspension of the underwriting license of PT BNI Securities was connected with the failure of the IPO by PT Wahanaartha Harsaka. In the past five years the division of investment banking contributed less than 5% to the company's income on the average a year.

In 2009, the performance of BNI Securities is expected to improve as the prices of government bond began to return to the normal levels. BNI Securities holds the bond until maturity and will earn at least the interest.

Among all securities companies 9 have become public companies. They are Asia Kapitalindo Tbk, HD Capital Tbk, Kresna Graha Securindo Tbk, JJ NAB Capital Tbk, Panin Sekuritas Tbk, Panca Global Securities Tbk, Reliance Securities Tbk, Trimegah Securities Tbk and Yulie Sekurindo Tbk.

Securities market dominated by foreign companies

There are few foreign securities companies but they dominate the market in the country. In 2007, six foreign securities companies had a market share of 89% of underwriting market together. Local securities companies are much larger in number or more than a hundred but their share of the market is small or only 11%.

In 2008, seven foreign securities companies had a market share of 74%, leaving only 24% for local securities companies.

In 2008, bond issued were valued at Rp 72.9 trillion and share issued were valued at Rp 407.5 trillion. In May 2009, the marker value of bonds rose to Rp 74.8 trillion and that of shares to Rp 411,4 trillion

Main players

--Danareksa

State securities company PT. Danareksa Sekuritas was established in 1976. Danareksa has recorded good performance in securities business. Bloomberg said share and bonds issued in Indonesia in 2008 were valued at US$6.8 billion with 116 securities, 42 underwriters and fee 2.433%.

In 2008, Danareksa Sekuritas led in IPO and bond underwriting business in rupiah denomination Denomination

The stated value found on financial instruments.

Notes:
This term applies to most financial instruments with monetary values. The denomination for bonds and securities would be face value or par value.
 with a market share of 13.7% and a public offering value of US $929.1 million. Second n the lead was PT Bahana Securities with a market share of 12.1% and public offering value of US$ 820.81 million, followed by PT Mandiri Sekuritas with a market share of 8.2% and public offering value of US$ 554.5 million.

Danareksa became the underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite)


UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer.
 for 19 issuers in 2008 with 31 securities, and Bahana Securities handled the issuance and sales of shares and bonds of 7 companies.

The largest IPO underwritten by Danareksa in 2008 was that of PT Jasa Marga Marga can refer to:
  • Marga (Indian Philosophy)
  • Marga, a commune in Caraş-Severin County, Romania
  • Magga, one of the Four Noble Truths, in Buddhism
  • Marga (Batak), a family name in Batak society
  • Efraín Abdiel Alveo a.k.a.
 Tbk valued at US$ 90.5 million with a 2% fee, followed by IPO of PT Ciputra Property valued at US$ 69.1 million.

In 2009, Danareksa Sekuritas is expected to underwrite To insure; to sell an issue of stocks and bonds or to guarantee the purchase of unsold stocks and bonds after a public issue.

The word underwrite has two meanings.
 bonds valued at Rp 5 trillion to Rp 7 trillion. Danareksa has concluded cooperation as underwriter for 7 other companies including 3 companies issuing bonds and 4 launching IPO. Two of the companies are PT Bank Tabungan Negara (BTN BTN

In currencies, this is the abbreviation for the Bhutan Ngultrum.

Notes:
The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion.
) and, PT Perusahaan Listrik Negara PLN (Perusahaan Listrik Negara, lit. 'State Electricity Company') is an Indonesian government-owned corporation which runs the country Electricity. History  (PLN PLN

In currencies, this is the abbreviation for the Polish Zloty.

Notes:
The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion.
).

PT PLN is to issue bonds valued at Rp2.2 trillion, and Bank Tabungan Negara Rp 1.5 trillion to be underwritten by Danareksa. Danareksa charges only a fee of 1% of the value of the transactions.

BTN originally was ot issue the bond in 2008 but the plan was postponed as the market condition was not favorable. Almost all plans to issue bonds, valued at Rp 30 trillion, were postponed in 2008. Most IPO plans were also shelved in 2008.

This year, with cut expected in bank interest rates, bonds will be more interesting for fixed interest investment. Danareksa, therefore, may focus more on its investment advisory service business including in company restructuring service.

PT Kertas Kraft Aceh (KKA KKA Koyuk, Alaska (Airport Code) ) has also named PT Danareksa Sekuritas as its consultant to prepare restructuring and business plan. The office of the state minister for state enterprises has prepared alternatives by offering the producer of cement bag paper to state cement maker PT Semen semen
 or seminal fluid

Whitish viscous fluid emitted from the male reproductive tract that contains sperm and liquids (seminal plasma) that help keep them viable.
 Gresik Tbk or other cement producers. KKA is awaiting the result of studies by Danareksa Sekuritas to carry out company restructuring. KKA resumed operation in April 2008 after long left idle over scarcity Scarcity

The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently.
 in gas fuel supply. The company uses gas through swap arrangement for April-July operation. In August 2008, KKA was to convert its fuel with coal. So far KKA needs gas only as fuel. KKA is the largest producer of kraft paper for cement bags in the country. It has a production capacity of 135,000 tons per year. Its factory in Lhokseumawe, Nanggroe Aceh Darussalam is the only producer of cement bag paper in the country.

Bank Mandiri is awaiting the result of studies from Danareksa before deciding the option of restructuring of KKA. Bank Mandiri is the largest creditor of KKA which owes the state bank Rp 165 billion of its total debt of Rp 300 billion. It also has debt to ExxonMobil amounting to Rp 65 billion in gas price. KKA needs Rp 500 billion-Rp 600 billion to convert gas fuel into coal fuel. KKA also needs fund to build coal gasification gas·i·fy  
tr. & intr.v. gas·i·fied, gas·i·fy·ing, gas·i·fies
To convert into or become gas.



gas
 plant and improve it production technology to improve its product standard.

--Trimegah

Trimegah Securities was established in 1990, and became a public company in 2000. It has 14 branches in 11 large cities in the country including Surabaya, Medan, Semarang, Bandung, Makassar, etc.

In 2007 Trimegah, IPO underwriting was the third largest contributor to its income after brokerage and asset management. Share underwriting was more interesting than bond underwriting as the fee is much higher. Fee for bond underwriting is only 0.5%-0.7% P as against 2%-2.5% for share underwriting fee Underwriting fee

The portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their services.
.

Trimegah was lead underwriter Lead underwriter

The head of a syndicate of financial firms that are sponsoring an initial public offering of securities or a secondary offering of securities. Could also apply to bond issues.
 for the IPO of Sat Nusapersada Overwiev PT. Sat Nusapersada Tbk (www.satnusa.com), established in 1990, located at Batam Island, Indonesia, 45 minutes by ferry from Singapore. Founded by Mr. Abidin (Chief Executive Officer), Sat Nusapersada began operation as a supplier of Printed Circuit Board (PCB)and mechanical part  in November 2007. However, the share price of the issuer has continued to decline. In 2008, PT Trimegah Securities Tbk (TRIM) sold 22.07% of the share of PT Sat Nusapersada Tbk (PTSN PTSN Public Telephone Switched Network ), an electronic assembling company owned by Sofjan Wanandi. The shares were valued at Rp 254.1 billion. Trimegah already sold 390.92 million shares of Sat Nusapersada at the Indoensian Stock Exchange formerly Jakarta Stock Exchange Jakarta Stock Exchange

Established in 1977, the largest securities exchange in Indonesia.
.

In 2008, Bank Permata cooperated with Trimegah Sekuritas to launch virtual account for share transaction players among the customers of Trimegah Sekuritas. Virtual Account is a payment solution developed by Bank Permata to support the business need of partners, which continue to grow. With virtual account the customers of Trimegah Sekuritas could conduct payment and fund revenue from share transactions directly and instantly.

Trimegah had only a 10% share of bond underwriting market in the period of January-May 2009 valued at Rp 1.63 trillion or 19.47% of the total market value of Rp 8.43 trillion. Data from Bloomberg showed that security underwriting in he first five months of that year reached Rp 8.43 trillion, still below previous year's record of Rp 10.4 trillion in the same period.

Based on the financial report of Trimegah, its profit sank 206.01% from Rp 95.72 billion in 2007 to Rp 31.28 billion in 2008 on a 2.74% increase in operating cost from Rp 188.19 billion in 2007 to Rp 193.35 billion in 2008. In addition, the operating income of the company also shrank from Rp342,28 billion in 2007 to Rp 288.88 billion in 2008, bringing down its operating profit Operating profit (or loss)

Revenue from a firm's regular activities less costs and expenses and before income deductions.


operating profit

See operating income.
 from Rp 123.33 billion in 2007 to Rp 45.5 billion in 2008.

The assets of the company also fell 72.99% from Rp 1.67 trillion in 2007 to Rp 968.11 billion in 2008 bringing down its net profit per share from Rp 28 in 2007 to Rp 9 in 2008.

Declining performance forced the company to cut 10% of jobs and the salaries of its commissioners and directors by 10%-20%.

--Mandiri Sekuritas

PT Mandiri Sekuritas was established in 2000 as a subsidiary of state lender Bank Mandiri, which owns 95.69% of its shares. Mandiri Sekuritas in the underwriting market could form synergy with its parent company PT Bank Mandiri Tbk, the country's largest lender in assets similar to the position of CIMB-GK Securities and its parent company Bank CIMB CIMB Commerce International Merchant Bankers Berhad
CIMB Current Issues in Molecular Biology (periodical)
CIMB Corporate Information Management Branch (British Columbia, Canada) 
 Niaga.

Based on research data collected by Bloomberg 2008, PT Mandiri Sekuritas led in underwriting market for corporate bonds putting behind long market leader Danareksa Sekuritas. The value of bonds underwritten by Mandiri Sekuritas reached Rp7.133 trillion and had a market share of 43.1% with 30 bond transactions.

In 2009, PT Mobile-8 Telecom Tbk (operator of Fren cellular) named Mandiri Sekuritas as its financial advisor representing its bond holder in connection with financial due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired.  of Mobile-8 and preparing alternative in the settlement of its bonds.

Mandiri Sekuritas wants to develop online trading Online Trading

Making trades via the Internet.

Notes:
The use of online trading increased dramatically in the mid to late 1990's with the advent of high-speed computers and Internet connections. Stocks, bonds, options, futures, and currencies can all be traded online.
 system expected to be operational in the second half of this year. Mandiri Sekuritas is also integrated with Bank Mandiri in the management of the bank investments. Through the cooperation, Mandiri Sekuritas will use the network of Bank Mandiri for only trading.

In 2009, Mandiri Sekuritas hopes to earn the largest part of income from equity trading In finance, equity trading is the buying and selling of company stock shares. Shares in large publicly-traded companies are bought and sold through one of the major stock exchanges, such as the New York Stock Exchange, London Stock Exchange or Tokyo Stock Exchange, which serve as . Earlier Mandiri Sekuritas set a target for income from equity trading only around 20%-30% of its total income but this year the portion is raised to 50%.

In the beginning Mandiri Sekuritas focused on business as bond executive underwriter, but as income from this business was less interesting the company changed its core business to equity trading. Its fee from equity trading is 0.25%0.7%. It has not done business in IPO underwriting. Its market share in equity trading was still relatively low at 2% in 2008. Its target for daily transaction is Rp 250 billion with a market share of 4%-5 %. Mandiri Sekuritas targets to record 10,000 customers as retail investors by the end of this year. Currently it has around 5,500 customers Mandiri Sekuritas cooperates with Bank Mandiri eyeing the customers having deposits at its parent company.

In the first semester se·mes·ter  
n.
One of two divisions of 15 to 18 weeks each of an academic year.



[German, from Latin (cursus) s
 of 2008, PT Mandiri Sekuritas led in the market of securities underwriting business with the largest market share of 19.6%, involving 23 securities valued at Rp 3.45 trillion. It already led in the first quarter of 2008 with securities underwritten valued at Rp 2.67 trillion leaving behind PT Danareksa Sekuritas, which was he market leader in the previous year.

Mandiri Sekuritas issued short term securities or Medium Term Notes (MTN MTN

A short-form for Medium Term Note.


MTN

Medium term notes issued by corporations, much like shorter-term commercial paper.


MTN

See medium-term note (MTN).
) valued at Rp 37.4 billion. The interest offered was attractive at 16%. The MTN is named SBJP Mandiri Sekuritas Phase I of 2008. The MTN has been listed on the Kustodian Sentral Efek Indonesia (KSEI KSEI Kustodian Sentral Efek Indonesia
KSEI Kelompok Studi Ekonomi Islam (indonesia) 
) with a code name of MTN SBMS SBMS Southwestern Bell Mobile Service
SBMS Spanish Broadcast & Media Services (University of California)
SBMS State Bureau of Surveying and Mapping
SBMS South Brandywine Middle School (PA, USA) 
01XXMF. Fund from the MTN sales is used as working capital and for investment bank transaction.

In corporate bond underwriting market PT Mandiri Sekuritas put behind DBS (Direct Broadcast Satellite) A one-way TV broadcast service from a communications satellite to a small round or oval dish antenna no larger than 20" in diameter.  Group Holdings Ltd and PT Danareksa Sekuritas in the first quarter of 2008 from the fourth and fifth in the lead in the previous year.

Mandiri had a market share of 9.2% with securities underwritten valued at US$288.5 million including bonds of PT Indosat Tbk, PT Thames PAM Jaya, PT Bank DKI DKI Dynamic Keyword Insertion
DKI Disaster Kleenup International (Wood Dale, IL)
DKI diffusional kurtosis imaging
DKI Don't Knock It
DKI Device Kernel Interface
, and PT Lautan Luas Tbk. The underwriting value rose from US$ 24.19 million or the eight in the rank with a market share of 1.3% in the previous year.

Mandiri Sekuritas with broker code of CC is a local company having high net working capital. Its adjusted net working capital (MKBD) was Rp 127.226 billion in 2008.

Minimum limit of working capital is Rp25 billion

Adjusted net working capital (MKBD) reflects the financial strength and operating capacity of a company The higher MKBD the better the performance of a securities company especially in service quality, human resource quality and discipline and loyalty to company regulation as well as quality of system back office.

MKBD of a securities company is like capital adequacy ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss.  for a bank. MKBD is one of indications showing how healthy a securities companies financially and in capital.

Bapepam-LK has ruled that increase in paid up capital and MKBD of securities companies must be made in line with the General Principles of International Organization of Securities Commission (IOSCO IOSCO

See International Organization of Securities Commissions (IOSCO).
) which says there must be continued increase in the requirements to be met by securities companies that they continue to be observant of the prudential principles. such as in early capital structure and maintenance in connection with growing risk potentials to be met by securities companies.

BEI recorded 15 securities companies which have their MKBD cut close to the minimum limit of Rp25 billion. If the MKBD fell to that limit the market authority could suspend their operation as share trade brokers.

A number of securities companies having MKBD close to the minimum limit have made progress in improving their position. Some 13 of them have injected in·ject·ed
adj.
1. Of or relating to a substance introduced into the body.

2. Of or relating to a blood vessel that is visibly distended with blood.



injected

1. introduced by injection.

2. congested.
 capital to increase their MKBD.

Based on data at BEI, the 13 securities companies have improved their MKBD, from the precarious position on 29 October 2008. However, there are still 8 companies needing to improve their MKBD to move away from the limit.

The 13 companies are PT Sekuritas Indo Pasifik Investasi (GA) with MKBD rising from Rp25.001 billion to Rp27.191 billion; PT Makindo Securities (DD) from Rp 25.064 billion to Rp 25.750 billion; PT First Asia Capital (PC) Rp 25.128 billion to Rp 25.869 billion.

PT Anugerah Securindo Indah (ID) from Rp 25.146 billion to Rp 27,506 billion; PT NC Securities (LH) Rp 25.213 billion to Rp 25.811 billion; PT Signature Capital Indonesia (FA) Rp 25.223 billion to Rp 27.506 billion; PT Pratama Capital Indonesia (PK) Rp 25.281 billion to Rp 30.420 billion; PT Financorpindo Nusa (AY) Rp 25.420 billion to Rp 30.727 billion.

PT Paramitra Alfa Sekuritas (PS) Rp 25.504 billion to Rp 26.087 billion ; PT Brent Securities (HK) Rp 25.550 billion to Rp 32.869 billion; PT Redialindo Mandiri (DU) Rp 25.581 billion to Rp 25.651 billion; PT Mahastra Capital Indonesia (GI) Rp 25.783 billion to Rp 38.873 billion; PT Millenium Danatama Sekuritas (SM) Rp 25.843 billion to Rp 27.947 billion.

Meanwhile, the MKBD of PT Eurocapital Peregrine Securities (SD) has not changed from Rp 25.761 billion as it was still suspended. The MKBD of PT Millenium Atlantic Securities (RG) even declined from Rp 25.403 billion on 29 October 2008 to Rp 25.348 billion.

PT OSK OSK On Screen Keyboard
OSK Osaka Shosen Kaisha (Japanese shipping line)
OSK One Shot Kill (gaming clan)
OSK Oslo Seilflyklubb (Norwegian: Oslo Gliding Club) 
 Nusadana Securities is among the securities companies having the highest MKBD. Other securities companies are Amantara Sekuritas and Credit Suisse The Credit Suisse Group (SWX:CSGN, NYSE: CS) is a financial services company, headquartered in Zürich, Switzerland. It is the second-largest Swiss bank, behind UBS AG. . OSK Nusadana having MKBD at Rp 307.40 billion and Rp 298.62 billion respectively.

Based on data in March 2009, among leading securities companies having large MKBD included. Danareksa (Rp 292.89 billion), Sinarmas Sekuritas (Rp 258.41 billion), Trimegah (Rp 235.37 billion), JP Morgan (Rp 229 billion), CLSA (Rp 210.79 billion), Bahana (Rp 208.12). and Macquarie Capital (Rp 199.65 billion).

Conclusion

Fluctuation Fluctuation

A price or interest rate change.
 has been recorded in the growth of securities business to follow the trend in the capital market. The improving trend until May, 2009 is expected to continue through the rest of the year, with expected improvement in the condition of the country's macro economic indicators Economic indicators

The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate.
. Macro economic indicators have improved lately marked by a cut in bank interest rates, lower inflation rate, rupiah strengthening against the US dollar and rising IHSG.

The capital market is expected to be brisker with the improved economic indicators. The introduction of remote trading, e-reporting and other modern system of trading have drawn investors to he capital market.

In addition, simplification of procedures and incentive in 5% income tax cut for issuers have also provided greater attraction for more companies to launch IPO.

Therefore, business in underwriting in 2009 is also expected to be brisker especially as many companies have recovered from the slump caused by the global financial crisis. In 2009, there are 19 companies planning to launch IPO.

However, competition in the underwriting market has been sharp with the market continuing to be dominated by big foreign securities companies. Foreign companies dominate 74% of the market leaving only 24% of the market for the local rivals, which are much larger in number.

In general the performance of security industry in 2009 is expected to improve but the impact of the global financial crisis will remain a threat hampering the expansion of the industry.
Table--1
List of securities companies, status and line of business, 2009

Name of companies           Status   Underwriter   Broker   Investment
                                                             managers
ABN Amro Asia Securities
  Indonesia                 PMA           V          V
Aldiracitra Corpotama       PMDN          V          V
Amantara Securities NISP
  Sekuritas                 PMDN          V          V
AmCapital Indonesia         PMA           V          V          V
Andalan Artha Advisindo
  Sekuritas                 PMDN          V          V
Aneka Arthanusa Sekurindo   PMDN                     V
Anugerah Securindo Indah
  Overseas Securities       PMDN                     V
Artha Securities            PMDN          V
Asia Kapitalindo
  Sekurities Tbk            PMDN          V          V          V
Asjaya Indosurya
  Securities                PMDN          V          V          V
Bahana Securities Panca
  Global Securities Tbk     PMDN          V          V
Bali Securities Panin
  Sekuritas Tbk             PMDN                     V          V
Bapindo Bumi Sekuritas      PMDN          V          V
  Peak Securities
Batavia Prosperindo
  Sekuritas                 PMDN          V          V
Bhakti Securities
  Recapital Securities      PMDN          V          V
Binaartha Parama Reliance
  Securities                PMDN
BNI Securities Samuel
  Sekuritas Indonesia       PMDN          V          V          V
BNP Sakuritas Indonesia     PMA           V          V
Bumiputera Capital
  Indonesia                 PMDN          V          V
Brent Sekutiries            PMDN          V          V          V
Buana Capital               PMDN                     V
CIMB-GK Securities
  Indonesia Semesta
  Indovest                  PMA           V
Ciptadana Securities        PMDN          V
Citi Pacific Securities     PMA           V          V
Danareksa Sekuritas         PMDN          V          V          V
Danpac Sekuritas            PMDN          V          V          V
Clemont Securities
  Indonesia                 PMA                      V
CLSA Indonesia              PMA           V          V
Danareksa Sekuritas         PMDN          V          V
Dhanawibawa
  Arthacemerlang            PMDN                     V          V
Danasakti Sekuritas         PMDN          V          V
Danatama Makmur             PMDN          V          V          V
Danpac Sekurities           PMDN          V          V
BDS Vickers Securities
  Indonesia                 PMA           V          V
Deutsche Securities
  Indonesia                 PMA           V          V
Dinamika Usaha Jaya         PMDN          V          V          V
Dinar Sekurities            PMDN                     V
Dongsuh Securities          PMDN                     V
Dwidana Sakti Sekurindo     PMDN                     V
E-Capital Securities        PMDN          V          V
Ekokapital Securities       PMDN                     V          V
Equity Securities
  Indonesia                 PMDN          V          V
Erdhika Elit Valbury Asia
  Securities                PMDN                     V
eTrading Securities         PMA                      V
Evergreen Capital
  Victoria Sekuritas        PMDN          V          V          V
Finan Corpindo Nusa Yulie
  Sekurindo                 PMDN                     V          V
Harita Kencana Securities   PMDN                     V
HD Capital Tbk              PMDN                     V
Henan Putihrai Sekuritaa    PMDN                     V
HSBC Securities Indonesia   PMA           V          V
Indo Primer Securities      PMDN          V          V          V
Indonesia Minna Padi
  Investama                 PMDN          V          V          V
Semesta Indovest            PMDN          V          V          V
Indomitra Securities        PMDN          V          V
Inovasi Utama Sekurindo     PMDN                     V
Infikasa Sekurindo          PMDN          V          V
Intiteladan Arthaswadaya    PMDN                     V
Investindo Nusantara
  Sekuritas                 PMDN          V          V
JJ NAB Capital Tbk          PMDN          V          V
JP Morgan Securities
  Indonesia                 PMA           V          V
Kapita Sekurindo            PMDN
Kresna Graha Sekurind       PMDN          V          V          V
Kapitalindo Utama           PMDN                     V
Kim Eng Securities          PMA           V          V
Kresna Graha Sekurindo
  Tbk                       PMDN                     V          V
Lautandhana Securindo       PMDN          V          V
Macquarie Securities        PMA           V          V
  Capital Indonesia
Madani Sekurities           PMDN          V          V
Mahakarya Artha
  Securities                PMDN                     V
Mahanusa Securities         PMDN          V          V
Mahastra Capital            PMDN                     V
Makindo Securities          PMDN          V
Makinta Securities          PMDN          V          V          V
Mandiri Sekuritas           PMDN          V          V
Mega Capital Indonesia      PMDN          V          V          V
Masindo Artha Securities    PMDN          V          V          V
Mentari Sekurindo           PMDN                     V
Meryll Lynch Indonesia      PMA           V          V
Millenium Danatama
  Sekuritas                 PMDN                     V
Millenium Atlantic
  Securities                PMDN                     V
Minna Padi Investama        PMDN          V          V
NC Securities               PMDN          V          V
NA CIMB-GK Securities       PMDN          V          V          V
Net Sekuritas               PMDN                     V
Nikko Securities
  Indonesia                 PMA           V          V          V
NISP Sekuritas              PMDN          V          V          V
Nomura Indonesia            PMA           V          V
Nusadana Capital
  Indonesia                 PMDN          V          V
Optima Kharya Capital
  Securities                PMDN          V          V          V
Overseas Capital            PMDN          V          V
Pacific Capital             PMDN          V          V
Pacific Duaribu
  Investindo                PMDN                     V
Panca Global Securities     PMDN          V          V
Panin Capital               PMDN                     V
Panin Sekuritas             PMDN          V          V
Paramitra Alfa Sekuritas    PMDN                     V          V
Patalian Water Securindo    PMDN          V
Phillips Securities
  Indonesia                 PMA                      V          V
Pratama Capital Indonesi    PMDN          V          V          V
Primasia Securities         PMDN                     V
Prime Capital Securities    PMDN                     V
Recapital Securities        PMDN          V          V
Redialindo Mandiri          PMDN                     V
Reliance Securities Tbk     PMA           V
Republic Securities         PMDN          V          V
Samuel Sekuritas
  Indonesia                 PMDN                     V
Sarijaya Permana
  Sekuritas                 PMDN          V          V          V
Sekuritas Indo Pasifik
  Investasi                 PMDN                     V
Semesra Indovest            PMDN                     V          V
Senni Cahaya                PMDN                     V
Signature Capital
  Indonesia                 PMDN                     V          V
Sucorinvest Central Gani    PMDN          V          V          V
Tiga Pilar Sekuritas        PMDN          V          V          V
Trimegah Securities Tbk     PMDN          V          V
Valbury Asia Securities     PMA           V          V
Victoria Sekuritas          PMDN          V          V          V
Yulie Sekurindo             PMDN          V          V          V

Source : BEI

Table--2
Value of share and bond  underwriting market, 2005-2009
(Rp billion)

                      Corporate   Government
Year      Shares        bonds       bonds         Total

2005     801,252.70   63,891.34   399,859.31   1,264,003.35
2006   1,249,074.50   67,805.54   418,751.20   1,735,631.24
2007   1,988,326.20   84,653.03   475,577.78   2,548,557.01
2008   1,076,490.53   72,979.44   525,694.73   1,675,164.70
2009 * 1,517,235.28   74,750.24   556,233.02   2,148,218.54

Source : Bapepam-LK

Note * :  until May

Table--3
Profile of securities companies going public, December 2008
(Rp million)
                                   Total
Name of companies                  asset    Income    Profit/loss

Trimegah Securities Tbk           968,116   288,878        31,282
Panin Sekuritas Tbk               933,563   173,891        36,477
HD Capital Tbk                    602,288    85,651     (118,202)
Kresna Graha Securindo Tbk        377,545    62,702         4,253
Reliance Securities Tbk           328,991    44,994        10,519
Panca Global Securities Tbk       193,984    22,618         6,656
Asia Kapitalindo Securities Tbk    86,164    13,922           609
Yulie Sekurindo Tbk                56,357       876           954
JJ NAB Capital Tbk                 36,775     7,740      (10,761)

Source : BEI

Table--4
Securities market and foreign and local shares, 2008

Description                    Share (%)

Foreign securities companies      74
Local securities companies        26
Total                             100

Source: ICN

Table--5
15 securities companies facing suspension, 2008

Name of companies                       Capital

Sekuritas Indo Pasifik Investasi, PT     25,001
Makindo Securities, PT                   25,064
First Asia Capital, PT                   25,128
Anugerah Securindo Indah, PT             25,146
NC Securities, PT                        25,213
Signature Capital Indonesia, PT          25,223
Pratama Capital Indonesia, PT            25,281
Millenium Atlantic Securities, PT        25,403
Financorpindo Nusa, PT                   25,420
Paramitra Alfa Sekuritas, PT             25,504
Brent Securities, PT                     25,550
Redialindo Mandiri, PT                   25,581
Eurocapital Peregrine Securities, PT     25,761
Mahastra Capital Indonesia, PT           25,783
Millenium Danatama Sekuritas, PT         25,843

Source : BEI
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Title Annotation:INDUSTRY
Publication:Indonesian Commercial Newsletter
Article Type:Company overview
Date:May 1, 2009
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