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Securities Trading in an Emerging Market: Indonesia, 1890s-1950s

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  • Pierre van der Eng

Abstract

This paper analyses trends in the development of the stock exchange in Jakarta between its stepwise institutionalisation since 1898 and its demise after 1958. The paper contributes to literature on the significance of stock markets in the process of mobilising external capital for investment by private enterprise in emerging economies. It finds that the brokers participating in the stock exchange traded shares and bonds of companies operating in Indonesia and registered in Indonesia or in The Netherlands. Many of these securities were also traded on the much larger stock exchange in Amsterdam. Although formally independent, both securities markets were integrated. Based on estimates of relatively high market capitalisation during 1901-1940, the paper concludes that the Jakarta and Amsterdam stock exchanges together contributed significantly to the mobilisation of private investment and the development of private enterprise in Indonesia.

Suggested Citation

  • Pierre van der Eng, 2022. "Securities Trading in an Emerging Market: Indonesia, 1890s-1950s," CEH Discussion Papers 06, Centre for Economic History, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:hpaper:105
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    File URL: https://cbe.anu.edu.au/researchpapers/CEH/WP202206.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    stock exchange; securities; capital market; institutional development; Indonesia;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

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