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ement producer PT Semen Baturaja received a warm welcome from investors during its first trading day at the Indonesia Stock Exchange (IDX) on Friday as confidence seemed to have returned in the market after the recent price slump.

The company'€™s shares, sold under the code '€œSMBR'€, opened at Rp 590 (5.9 US cents) or 5.4 percent higher than its initial public offering (IPO) price of Rp 560. The price, which reached its peak at Rp 700 in the afternoon trading session, closed the day Rp 570, down 3.4 percent from the opening price, but 1.8 percent higher from the IPO price.

The price rally occurred across the board in line with the improvement in the trading sentiment in the other Asian markets. The Jakarta Composite Index (IDX), the main index at the Indonesia Stock Exchange (IDX) gained 3 percent to close at 4,818.90. The price index fell to 4,418.82 on Friday after reaching its peak at 5,214.98 on May 20 as foreign investors left the market amid growing concern that the US central bank would reduce its bond-buying program.

Semen Baturaja became the 17th firm that was listed on the IDX this year and the 20th state-owned enterprise that had entered the market. The company'€™s market capitalization reached Rp 5.51 trillion, data from the IDX show.

Valbury Asia Securities analyst Budi Rustanto said the positive response from the market indicated that investors still had strong confidence in shares of cement manufacturers or in infrastructure-related companies.

 '€œI predict that they will continue purchasing Semen Baturaja'€™s shares in the future, especially because the price is currently lower than that of its competitors,'€ he said during a telephone interview.

Besides Semen Baturaja, there are several other major cement manufacturers listed on the IDX; PT Semen Indonesia (SMGR), PT Holcim Indonesia (SMCB) and PT Indocement Tunggal Prakarsa (INTP). As of Friday, SMGR'€™s shares price stood at Rp 17,100, while those of SMCB and INTP stood at Rp 2,450 and Rp 24,450, respectively.

Semen Baturaja'€™s relatively limited marketing coverage would not hinder potential buyers from purchasing the shares, Budi said, adding that the company could expand its network in the future, in line with its planned increase in production capacity.

Semen Baturaja reaped Rp 1.31 trillion from the sales of the company'€™s 23.8 percent share during the IPO. After the IPO, the government'€™s ownership within the company was reduced to 76.2 percent.

As previously reported, all proceeds from the IPO will be used to partly finance the construction of its Rp 2.65 trillion integrated cement factory in South Sumatra this year. The factory will boost the company'€™s annual production capacity by threefold to 3.85 million tons when it is completed in 2016.

Semen Baturaja president director Pamudji Rahardjo said that it planned to expand its business coverage beyond the southern part of Sumatra in the long term. '€œWe hope our annual production capacity will reach between 6 and 7 million tons by 2020. Furthermore, by 2025, we expect the capacity will increase to 10 million tons per year,'€ he said in a press conference.