T

he Indonesia Stock Exchange (IDX) looks like it will miss its target of having 30 new companies listed on the bourse this year as only 20 newcomers had listed shares as on Wednesday.

Several companies, which had earlier planned listing, decided to postpone their entry into the bourse.

Given this unfavorable condition, the stock market is considering lowering its target for next year.

IDX president director Ito Warsito attributed the bourse'€™s failure to meet its target to political tension as a result of the legislative and presidential elections.

He said, political tension had weakened the companies'€™ appetite to go public this year, making it hard for the stock market to meet its initial goal.

'€œThe political situation through the year was not really conducive to us fulfilling our goal. There are 10 companies that decided to delay their respective Initial Public Offering [IPO] until next year,'€ he told reporters on Wednesday.

To date, only 20 firms have listed their shares on the bourse, making it difficult for the stock market to narrow the gap with only a few weeks remaining.

Among the companies to list their shares this year are state-run precast concrete subsidiary Wijaya Karya Beton (WTON), Blitz Megaplex cinema operator Graha Layar Prima (BLTZ), Bakrie'€™s media firm Intermedia Capital (MDIA) and transportation firms Eka Sari Lorena Transport Tbk (LRNA) and Blue Bird.

Oil and gas shipping company Soechi Line is the latest firm to make its stock market debut, entering the bourse Wednesday with its share price rising by about 24 percent.

Indonesia'€™s largest taxi operator, Blue Bird, raised the most funds among firms going public this year, pocketing Rp 2.44 trillion (US$198.36 million) from an IPO last month.

Among the companies that decided to postpone their planned IPO was gold miner Archi Indonesia, part of conglomerate Rajawali Corpora.

Reuters reported that the company decided to delay its IPO, which was intended to source Rp 4.6 trillion in fresh funds, given weak investor interest.

Ito further added that the bourse planned to trim its aim of having 35 new companies listed next year, down to 32 firms, given the conditions.

MNC Securities analyst Reza Nugraha agreed that the political situation, as well as slowing macroeconomics, were behind the stock market'€™s failure to meet its target.

'€œCompanies have no confidence in making their debut during an election year and with dwindling macroeconomic conditions they are worried that their shares won'€™t be absorbed by the public. Some, like Blue Bird and Soechi, fueled by such fears decided to trim their IPO target,'€ he said.

Reza said the condition might continue next year, as macroeconomic indicators were projected to keep slowing, coupled with an increase in the central bank'€™s interest rate that could scare away foreign investors.

'€œBut the bourse should keep in mind that it is better to maintain IPO quality not quantity. Many companies that entered the bourse this year booked net losses in their financial reports and this might counter investors'€™ trust,'€ he went on.

To ensure more firms are listed on the stock market, the Financial Service Authority (OJK) and IDX have introduced and planned several regulations.

The moves include a regulation, introduced earlier this month, to allow miners that have yet to start production to float their shares to the public. The OJK and IDX have also deliberated on the use of an electronic registration system for companies hoping to go public, which would enable firms to apply for an IPO electronically, which is expected to cut costs and simplify procedures.

They have also previously stated that starting in the first half of 2015, investors will be able to purchase shares offered in an IPO online, as the regulator and the stock market were mulling a plan to allow better access to the country'€™s capital market.