TEHRAN (FNA) – Iran and Indonesia have established cooperation in development of capital markets in the two countries.A memorandum of understanding on the cooperation was signed in Jakarta on Monday by the Indonesian Capital Market and Non-Bank Financial Institution Supervisory Agency (Bapepam-LK) and the Securities and Exchange Organization (SEO) of Iran.
The MoU was signed by Bapepam-LK Chairman A Fuad Rachmany and SEO Chairman Ali Salehabadi at the Bapepam-LK office in Jakarta on Monday.
Rachmany said after the signing ceremony that Iran’s capital market had developed in almost the same say as Indonesia’s so that the industries had the potential to be developed through cooperation in the future.
“Iran has many large state-owned companies which will enter the capital market. Its stock market is relatively progressive with market capitalization worth US$50bln,” Rachmany said.
He said the Iranian market capitalization was still lower than Indonesia’s which in 2007 reached Rp2,539.04trln.
“Iran wants to cooperate with us because it thinks that our capital market is well developed in Asia,” he added.
In the meantime, Ali Salehabadi said Indonesia was a predominantly Muslim country with a relatively progressive stock exchange market.
“We are brothers and need to cooperate in various fields including in the exchange of information, knowledge and experience,” he said.
Meantime, Ali Rahmani, chairman of the Tehran Stock Exchange (TSE), was quoted by IRNA as saying that the MoU between the two countries’ stock exchanges will allow Iranian and Indonesian companies to be listed in each other’s bourses.
Subject to permission from the relevant Indonesian authorities, the Iranian stock exchange houses will be able to work alongside 24 Indonesian counterparts in Indonesia, he added.
The Indonesian stock exchange officials are interested in having an active presence in the stock markets of the Middle East, a goal they hope could be more easily realized by forging bilateral cooperation with their Iranian counterparts, Rahmani noted.
“Given the fact that 70 percent of stock exchange transactions in Indonesia are carried out by foreigners, Iran can help finance its companies and attract more foreign investors via this cooperation,” Rahmani said, adding that the MoU with Iran was widely covered by the Indonesian media.
The value of exchanges in the Indonesian bourse is four times that of Iran, amounting to some $200 billion a year.
Out of a population of 240 million, only 600,000 are said to have invested in Indonesian stock exchanges, with the rest going to foreign investors.