Flashback 2017: Be thankful, Tito Sulistio is not a member of OJK Commissioner Board

By : Abraham Sihombing And Aldo Bella Putra | Wednesday, December 20 2017 - 22:30 IWST

Direktur Utama Bursa Efek Indonesia, Tito Sulistito (indonesianindustry.com)
Direktur Utama Bursa Efek Indonesia, Tito Sulistito (indonesianindustry.com)

INDUSTRY.co.id - Jakarta - The title of this article seems stale because everyone, especially the Indonesian capital market community, knows very well that Dr. Tito Sulistio, SE, MAF was not elected to become a member of the Board of Commissioners of the Financial Services Authority (OJK), thus remaining the President Director of the Indonesia Stock Exchange (IDX).

Only problem is, why just now thankful? Why not do it when OJK announces the composition of its members of the Board of Commissioners, where Tito's name is not listed in it?

The world of capital markets is not a stranger to Tito Sulitio. Before serving as President Director of Indonesia Stock Exchange (BEI) for the period 2015-2018, the man graduated from University of Indonesia from Economics Department also served as Director of Surabaya Stock Exchange (BES) in 1995-1998.

In early February 2017, the announcement that Mr. Tito passed the selection of the first stage of the candidate member of the Board of Commissioners of the Financial Services Authority (OJK) could shake the psychological market causing anxiety among the Indonesian capital market community. The condition precisely occurred on Wednesday, February 8, 2017.

There was a colleague who connected the concerns of market participants to Tito's graduation in the selection of the first stage of the candidate of the Board of Commissioners of the OJK with the decline of JCI in the end of trading on that day.

Indeed, JCI in trading Wednesday (08/02/2017) is closed down 21 points or 0.4% to position 5860 compared to the position on the previous day at the level of 5381. In addition, the JCI on that day moved in the range of 5,349-5,382.

I myself do not know exactly, whether the two events that occur at the same time are related to each other. To be sure, God knows. However, market anxiety about the announcement of the selection results is quite reasonable.

The reason, according to some people who know Mr. Tito, both in the Indonesian capital market, especially in the SRO, as well as among the Directors and Board of Commissioners of IDX issuers, the presence of Mr. Tito's figure to lead the BEI is expected. On average they argue, the position of Tito pack on the BEI is very necessary once.

If in various state-owned enterprises the average position of top management, especially the position of President Director, is a political position. But this is not the case in IDX. The presence of Mr. Tito as the IDX captain is not only a political position.

Many people who judge Mr. Tito is the right person for the job. The reason, he understands the capital market itself technically. Therefore, the various policies adopted by the Board of Directors of BEI post he served seem quite flexible.

There are two interesting things observed from the various efforts made by Mr. Tito in BEI this year. First, he always upholds the principle of alignment to retail investors in the Indonesian capital market.

The alignment of retail investors is very visible when he asks PT Indonesia Asahan Aluminum (Inalum), after taking over state-owned shares in three state-owned mining companies to tender offer.

In a press conference in Jakarta on Wednesday (15/11/2017), Tito argued that the request solely to protect retail investors where the average shares of their ownership in the three state-owned mining companies is a minority. The three issuers are PT Tambang Batubara Bukit Asam Tbk (PTBA), PT Timah Tbk (TINS) and PT Aneka Tambang Tbk (ANTM).

In fact, Tito asserted, the protection of retail investors is still the main substance of the corporate action plan. Therefore, Inalum was asked to immediately hold a tender offer after the transfer of government shares.

The assertion shows that the IDX strongly protects the interests of retail investors to maintain the continuity of trading transactions on the stock exchange. In any case, retail investors remain the backbone of trading on the exchange.

"For me, it's simple. Please perform the corporate action, but I request that minority shareholders be protected. So we should not only look at the explicit form of a governmental rule, but also have to pay attention to the main substance of a rule is made and applied," said Tito at that time.

In essence, Tito said, the SOE corporation action created a fundamental change to the institutional status. If it was a state-owned company, then it will change to no persero.

"In addition, before such changes take place, any company decision requires the approval of the DPR. However, after the change, then it becomes no longer necessary," added Tito.

Therefore, according to Tito, changes in institutional status in a corporation are the most fundamental thing for the existence of a company. In theory, with the occurrence of such fundamental changes, the company needs to conduct a tender offer.

That is some of the sentences quoted from Tito's words at that time. The sentence was pronounced with a straightforward and clear without a straightforward. What has become the standard of capital market rules, and then it must be implemented.

The second thing is that he is very smart to understand market conditions and analyze it so as to calm market conditions based on existing data. It happened recently in Kuta, Bali.

Before expressing his analysis, he began with questions to journalists who attended the Capital Market Workshop in Bali. "If you have money Rp1.000, keep lu belanjain lu Rp100 in minimarket. How much money do you have now? "

The average journalist answered the same, which is Rp900. The reason, they connect the answer with a mathematical formula. Then Mr. Tito casually asked again, "Lu believes not, there is a possibility that money is not reduced even can increase, for example to be Rp1.200."

As a result, the journalists frown their forehead to think hard. Why can you? Mr. Tito then said the reason, "Yes, you can get the lottery in the mini market. You got unexpected blessing. Yes, right?"

The reporters are dumbfounded, because there is also true explanation of his. Then Mr. Tito connects the story with the condition of foreign investors who transact on the BEI floor.

Tito Sulistio explained that as of December 14, 2017, foreign investors have made a net selling of shares worth Rp40.3 trillion. Nevertheless, the value of their shares rose by Rp187 trillion, from Rp1,691 trillion at the end of 2016 to Rp1,878 trillion per December 14, 2017.

According to Tito, despite its net selling reached Rp40.3 trillion, but the market capitalization value of stocks collected by foreign investors increased about Rp187 trillion during the period.

"Thus, it is not true if there are parties who say that foreign investors out of the Indonesian capital market after they make a net selling up to worth Rp40, 3 trillion," said Tito at that time.

Tito said, proof that foreign investors do not come out of Indonesia is the value of their portfolio increased Rp187 trillion! "Based on these facts, foreign investors are assumed to never want to leave the Indonesian capital market," added Tito.

Tito's statement makes the market players, especially local investors, to be more optimistic about the performance of the Indonesian capital market in the future. With explanations based on these data, Mr. Tito can calm Indonesia capital market investors.

That is the reason why Mr. Tito is indispensable in the Indonesian capital market. Therefore, the Indonesian capital market community should be grateful to God where Mr. Tito is not placed in OJK.

It is true that God made everything beautiful in its time. (Abraham Sihombing)

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