Indonesia's Financial Services Authority (OJK) said the country would need time to improve its capital market infrastructure before joining the integrated capital market to be developed as part of the 2015 Asean Economic Community (AEC).
The agency’s deputy commissioner, Sardjito, said Indonesia would only agree to open its capital market when all its infrastructure and companies were ready.
According to him, the country has not set any target or time frame for joining the integrated capital market, known as the Asean Trading Link.
So far, only three countries - Thailand, Singapore and Malaysia - have joined the Asean Trading Link.
“It wouldn’t be a beneficial agreement if it only enriched others. We need time to improve our infrastructure and our companies, because we are a very big market,” Sardjito told The Jakarta Post recently.
Under the single integrated capital market system, investors and companies in Asean countries will be able to freely trade securities in any market at competitive prices.
Despite pressure from some Asean countries with more “advanced” market infrastructure, namely Malaysia, Singapore and Thailand, Indonesia still doubts the market-integration plan.
One of the reasons is that the depth of Indonesia’s capital markets and the regulatory framework are not at par with the rest of the region. Therefore, Indonesia is not yet ready to fully embrace the AEC framework.