Well before the current Indonesia Stock Exchange started operations in 1977 in Jakarta, the city had been home to a stock exchange. Few know today of its existence and its operations remain a mystery. Colonial era publications are dismissive of its significance. What is fact and what is myth?

This presentation outlines the development of Jakarta’s first stock exchange, between its stepwise institutionalisation since 1898 and its demise in 1958. The purpose of the presentation is to place the case of Indonesia in the literature on the significance of stock markets in the process of mobilising external capital for investment by private enterprise in emerging economies. It turns out that brokers participating in the stock exchange traded the shares and bonds of companies that operated in Indonesia and that were registered in Indonesia or in The Netherlands. Many of these securities were also traded on the much larger stock exchange in Amsterdam. Although both securities markets were formally independent, their trading activities were highly cointegrated. Based on estimates of relatively high market capitalisation during 1901-1940, the presentation concludes that the Jakarta and Amsterdam stock exchanges together contributed significantly to the mobilisation of capital in The Netherlands, but increasingly also in Indonesia, for investment in the development of private enterprise in Indonesia.

This seminar will not be livestreamed. A recording and will be available to the public through ANU Indonesia Project Channel.