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hares of PT Mega Manunggal Property (MMP), a logistics property firm in the diversified Argo Manunggal Group, closed 49.6 percent higher than its initial public offering (IPO) price on the Indonesia Stock Exchange on Friday.

The shares, traded under the code MMLP, peaked and closed at Rp 875 (seven US cents) having opened at Rp 725, already 23 percent up from the IPO price of Rp 585. Meanwhile, the broader benchmark Jakarta Composite Index (JCI) only rose 0.1 percent during the day.

'€œThe firm has successfully attracted investors,'€ NH Korindo Securities analyst Reza Priyambada said, adding that the trading of MMP shares was beyond expectations.

In order to sustain MMP'€™s positive performance the company would have to conduct its business well so that investors kept on buying, Reza said.

MMP, which since 2010 has provided logistics facilities by leasing warehouses and office space, raised Rp 1 trillion from the IPO, having released 30 percent of its enlarged capital or 1.71 billion shares on June 8 and 9.

'€œWe aim to record significant growth in assets and logistics properties over the long term,'€ president director Fernandus Chamsi said at the indonesia stock exchange (IDX) debut ceremony. Proceeds from the IPO have been set aside for capital expenditure, of which Rp 900 billion will be used to buy 60 hectares mostly in Greater Jakarta. The remaining Rp 100 billion will be for the construction of logistics properties.

Fernandus said the firm would expand beyond Greater Jakarta next year. '€œWe are also eyeing East Java as the Cikapali toll road has started operations. Our business is closely related to distribution,'€ he explained.

MMP would only spend Rp 400 billion of the capex this year and the remainder probably next year, finance director Bonny Setiawan said.

The firm saw its IPO oversubscribed by up to 44 times during the book-building period, for which the company and its underwriter, Indo Premier Securities, held a road show including to Singapore and Hong Kong.

Following the IPO, MMP is now 69.3 percent owned by real estate and property agent PT Mega Mandiri Properti, 0.7 percent by its president commissioner Hungkang Sutedja, and 30 percent by the public.

MMP, a unit of one of Indonesia'€™s largest manufacturing companies Argo Manunggal Group, became the fifth company to list on the exchange this year, adding to 510 companies already floated on the bourse.

It is the third property firm to go public this year, following PT Puradelta Lestari, a subsidiary of property giant Sinarmas Land, and PT PP Properti, a subsidiary of state-owned housing constructor PT Pembangunan Perumahan.

The firm currently rents out warehouse space amounting to 163,757 square meters (sqm) in Greater Jakarta to 20 tenants, including consumer goods giant PT Unilever and Hong Kong-listed clothes and toys supplier Li & Fung.

It also owns space in Intirub Business Park in Halim, East Jakarta, an integrated logistics complex used by online fashion retailer Zalora.

Unilever and Li & Fung rent 194,000 sqm and 35,000 sqm respectively in the MM2100 Industrial Area in Cibitung, Bekasi, while MMP leases 65,000 sqm in Intirub Business Park.

Medium and long term leases lasting five years or more account for almost the entire revenue.

'€œAs we deal mostly with long-term contracts, revenues this year will remain stable,'€ Bonny said, adding that the company had not set a sales target. (foy)