From Government of Indonesia

Indonesia, Malaysia Look to Commodities Bourse

Indonesia and Malaysia may establish a joint commodities bourse to sell crude palm oil and natural rubber, The Jakarta Post reported on March 10.

The report said Vice President Jusuf Kalla had told a meeting in Jakarta between officials of the Malaysian and Indonesian chambers of commerce that a shared trading platform would allow the two countries to exercise more control over market prices for their two major commodities and avoid direct competition for a share of export markets.

The report quoted Kalla as saying that a shared trading platform would enable the two countries to get more remunerative prices on commodity exports, whereas direct competition for market share may lead producers to sell commodities at less-than-optimum prices.

Indonesia and Malaysia jointly produce about 85% of the world's palm oil and about 80% of its natural rubber.

Meanwhile, Malaysian stock exchange operator Bursa Malaysia is in early talks to buy strategic stakes in the stock exchanges of Indonesia and Vietnam, chief executive Yusli Mohamed Yusoff said on Thursday (15/3/07).

Bursa Malaysia wants to take part in the long-term growth of Asia's emerging equity markets and to use its 34-year-long experience to help less developed markets. "Those are the new growth markets," said Chris Oh, an analyst with JP Morgan in Kuala Lumpur. "They're still relatively immature so there's plenty of upside."

Asked if Bursa Malaysia is already in talks to buy equity stakes in Indonesia and Vietnam, Yusoff told Reuters in an interview, "On a preliminary basis, yes."

"The (exchanges) that look interesting are the ones that are coming up -- markets which are set to grow a lot in the future; markets like Indonesia, Vietnam," he said. "We would like to see how we can add value to those markets, and if we can add value to those markets we would like to have a share as well."
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