By Berni Moestafa & Novrida Manurung, Bloomberg, 21 January 2013
Indonesia’s Financial Services Authority plans to publish scorecards rating companies on the quality of their corporate governance as it begins supervising capital markets in Southeast Asia’s biggest economy.
The agency plans to rate the nation’s 50 biggest listed companies this year, said Muliaman Hadad, chairman of the newly minted regulator known by its Indonesian acronym of OJK. How companies treat minority shareholders and the roles played by board directors are among the criteria, he said in an interview in Jakarta on Jan. 15. OJK will consolidate supervision of capital markets, banks and non-bank financial institutions.
Hadad, a former central bank deputy governor, wants companies to improve practices to lure investors and broaden the pool of capital to fund growth. Indonesia’s economic recovery since the Asian financial crisis in 1997-1998, when the nation had to seek an International Monetary Fund bailout, has prompted Fitch Ratings and Moody’s Investors Service to raise their sovereign debt scores to investment grade.
“The market has high hopes with the establishment of OJK,” said Fadlul Imansyah, a Jakarta-based fund manager at CIMB-Principal Asset Management, which oversees about 2.1 trillion rupiah ($215 million) of assets. “The financial system cannot be divided into parts because what’s out there in the market is connected with one another.”Continue reading…