Indonesian bourses to merge, aim to lure new funds

Shareholders of Indonesia's Jakarta and Surabaya exchanges have approved a plan to merge the two bourses, a move aimed at revamping the country's capital market.

The merged exchange, the Indonesia Stock Exchange, with around 400 listed companies, is expected to develop a broader range of derivative instruments which will enable investors to hedge and manage risks more effectively.

Currently, both exchanges lack longer-dated instruments, which has prevented some investors from investing in the country as they cannot hedge their positions should there be a downturn in the market.

The new exchange will begin operations on Dec. 1 and is estimated to list companies with a total market capitalisation of around 2,400 trillion rupiah ($263.7 billion).