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Stock Exchange newcomers see shares soar after election
Two firms saw their shares jump by about 70 percent on their first day of trading, driven by the Indonesia Stock Exchangeâs (IDX) surging performance
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wo firms saw their shares jump by about 70 percent on their first day of trading, driven by the Indonesia Stock Exchange's (IDX) surging performance.
Political euphoria over the likely win of presidential candidate Joko 'Jokowi' Widodo, prompted the benchmark stock index, the Jakarta Composite Index (JCI), to hit 5,098.01, its highest level in 13 months on Thursday with all sub-indexes ending in positive territory, before it declined by 1.28 percent to 5,032.6 on Friday.
Property developer Sitara Propertindo and Islamic lender Bank Dinar closed as the bourse's top gainers during the day of trading, supported by strong demand after financial and property indices rose sharply in the previous day of trading, said an analyst.
Sitara shares opened trading at Rp 125 (1 US cent) per share, up by 17.9 percent compared to its initial public offering (IPO) price of Rp 106. Its shares quickly jumped by 69.8 percent to hit Rp 180 apiece.
Bank Dinar, meanwhile, debuted at Rp 149 per share, or up by 35.45 percent compared to its IPO price of Rp 110, before it later soared by 70 percent to Rp 180 a share.
The bourse later auto-rejected, or stopped transactions, the shares ' as stipulated by the stock market's regulations that trading would stop when shares priced below Rp 200 grew by more than 35 percent.
Asjaya Indosurya analyst William Surya Wijaya said that the jump in the debuted shares was driven by the current positive sentiment toward Wednesday's presidential election, which pollsters indicated in their quick count surveys was won by Jokowi over former general Prabowo Subianto.
The sentiment toward Jokowi's likely win have led the market to stay above the psychological benchmark of 5,000 since Tuesday. It only dropped 1.28 percent on Friday as investors started considering profit-taking.
'Investors are still affected by the growth on the previous day that they are upbeat to buy shares of the two newly listed companies. Moreover, property and finance indices booked the highest growth in Thursday's trading and the declines in the indices in Friday's trading were not that significant,' William explained.
The property and finance sectors grew the most on the previous day of trading with more than 3 percent and 2 percent, respectively, as investors acted on high hopes for Jokowi to advance the country's infrastructure by dropping regulations that adversely affect the property sector.
Sitara floated 4 billion shares, or 39.69 percent of its enlarged capital, to the public, generating a total of Rp 424 billion from its IPO.
Sitara president director Dedi Djajasastra said the company would use 63.5 percent of the IPO funds mostly to support its subsidiaries in acquiring new plots of land, and the remainder to pay off its debts.
'We are planning to acquire 200 hectares of land in Jakarta in one or two years' time,' he said.
The company currently has 200 hectares of land. It targets to see its annual revenue rise by 89.6 percent to Rp 210.43 billion and its net profit to increase by more than sevenfold to Rp 30.77 billion.
Bank Dinar, on the other hand, released 500 million of shares of 22.2 percent of its enlarged capital and generated about Rp 550 billion of capital after going public.
Bank Dinar president director Hendra Lie said that 75 percent of the IPO funds would be channeled as loans and the rest used to expand its network.
The company plans to open three new branches this year in North Jakarta, Serpong and Tangerang.
