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New listings appear at IDX after elections
The Indonesia Stock Exchange (IDX) is seeing an influx of new listings in the second half, as more companies have unveiled plans to carry out an initial public offering (IPO) in the remaining months of this year
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span>The Indonesia Stock Exchange (IDX) is seeing an influx of new listings in the second half, as more companies have unveiled plans to carry out an initial public offering (IPO) in the remaining months of this year.
As of Thursday, 34 companies had listed their shares on the IDX and another is expected to float its shares on Friday, the exchange’s data show. Therefore, as of Friday, there will be 35 listings, of the total, 25 listings were made after the presidential and legislative elections in April.
IDX assessment director I Gede Nyoman Yetna said on Monday that nine more companies were waiting to list their shares in the remaining months of the second half, bringing the total number of new listings to 42.
Thendra Crisnanda, head of research at securities firm MNC Sekuritas, told The Jakarta Post that the number of new listings would significantly increase in the second half, as many companies had chosen to list their shares after the presidential and legislative elections.
“Many companies feel that post-election is the best time for an IPO as [the sociopolitical] condition is more stable,” he said, adding that the government tended to make clearer policies after polls.
Another factor that might encourage more companies to offer shares to the public was because raising loans from banks would still be relatively expensive.
Lending rates are still relatively high because Bank Indonesia (BI) has held its benchmark rates for seven consecutive months, although some central banks in the region, including Australia, Malaysia and the Philippines, have cut their reference rates to revive economic growth.
Binaartha Parama Sekuritas analyst Nafan Aji told the Post on Tuesday that IPOs might be a cheaper alternative for companies to seek funding to finance expansions
Most of the share issuers were small and medium enterprises (SMEs) and had mostly raised less than Rp 1 trillion from their IPOs.
As of Wednesday, the total of funds raised from IPOs had reached Rp 8.96 trillion (US$632.89 million), with insurance firm PT Sinarmas MSIG Life being the biggest issuance so far with Rp 3.66 trillion.
Nafan said such a thing was normal because SMEs needed more funding to finance their expansions.
Despite the already crowded listing schedule this month, Nyoman seemed optimistic that the number of new listings in the remaining months of this year would be more than nine.
“We continue to talk with 33 underwriters to encourage more companies to list their shares on the stock market,” he said at the IDX building in Jakarta.
With such cooperation with the underwriters, Nyoman hopes the exchange will be able to meet its target of 75 new listings this year, he said. Last year, 57 companies listed their shares on the IDX , breaking the record of new listings.
Nafan said that although the target made it seem like the IDX was overly optimistic, he was optimistic that the bourse could achieve it.
“As the investment climate is more favorable, I think more opportunity will arise and encourage more companies to list their shares on the IDX,” he said.
