IPO proceed estimated to reach IDR30 trillion, IDX says

JAKARTA: Indonesia stock market authority estimates newly listed firms to derive IDR30 trillion from their initial public offering (IPO).This amount is similar with last years figure when Jakarta Composite Index (JCI) soared by 46%. So far, the index has just climbed 3.31% while there have been eight IPOs, valuing IDR7.28 trillion or 24.28% of the target at IDR30 trillion.Last year, the IPO was IDR30 trillion while rights issue was IDR50 trillion. This year, we expect more considering this years IPO target that involves around 25 companies, said Corporate Assessment Director Eddy Sugito at Indonesia Stock Exchange (IDX) yesterday.This particular target can be further boosted supposes there are more companies, especially natural resources based companies, both mining and plantation companies as well as retail companies are willing to list their stocks in market.On such occasion, Eddy also expects government to encourage more national companies to go public. Besides being more transparent, a listed company may also have unlimited source of fund through series of corporate actions.Along with more domestic companies penetration to capital market, he expects Indonesias market capitalization to exceed Singapores stock exchange that reaches IDR5,000 trillion. For the time being IDXs market capitalization is IDR3,300 trillion.Separately, Minister of State Owned Enterprises Mustafa Abubakar said that IPO of PT Tugu Pratama Indonesia, wholly owned subsidiary of PT Pertamina and two subsidiaries of PT Krakatau Steel Tbk will be held at the soonest next year.As a matter of fact, we expect PT Semen Baturaja to hold IPO this year, yet, it seems that they still need more time. For Perum Pegadaian, they still in a process to change status to limited company. If such process is completed than the IPO will be held at the same time with Semen Baturaja.Eddy also added that Indonesias stock authority still process IPO of 10 companies. Yesterday, PT Jaya Agra Wattie Tbk successfully held an IPO, the eight IPO of this year.Furthermore, there are two future listed companies that have already addressed their will to go public, PT Golden Energy Mines and PT Atlas Resources. Both companies have already held mini expose to us, not yet to Bapepam-LK, he said.As reported last Friday, PT Golden Energy Mines shall dispose 10%-20% stocks to public in August 2011 at IDR2,300-IDR3,500 per unit. For the time being, Sinarmas Groups still negotiates with six strategic investors.The other future listed company is PT Atlas Resources, also focusing on coal mining. Atlas Resources was once named PT Energi Kaltim Persada. Its mining sites are spread across East Borneo, South Sumatra and Papua.The fact that numerous companies willing to hold IPO may boost JCI to be above 4,000 only if macro-economic condition is supportive, said PT OSK Nusadana Securities Indonesia Director Mardy Sutanto.We are confident that JCI may reach 4,000 only if the economic condition is stable, political climate is conducive, inflation is maintained, and interest rate is low. Those facts may also urge foreign inflow to Indonesian market.Positive sentiments, being attributed by series of IPO this year highly depend on IPO structure and fundamental performance of related listed companies.Price negotiationUpcoming listed company PT Metropolitan Land Tbk (Metland) expects its IPO to be held on 20 June 2011, after being delayed from its initial plan on 13 May. Such delay occurs as the price negotiation with main investors is yet to complete.Unfortunately, Metland Director and Corporate Secretary Olivia Surodjo declined to specify who the main investors are as well as the number of shares absorbed on such IPO. The investor is a foreign investor, yet, it has branch office in Indonesia. The absorbed stock volume is quite significant, he said.During price establishment, the company did not face any excessive demand. Yet, he claimed positive responses from market particularly from institutional investors. In the meantime, retail investors only purchased less than 20% offered stocks.In line with the completion of such negotiation, today the company shall meet and hold last filing with Capital Market and Financial Institution Watchdog (Bapepam-LK). This meeting is also behind the initial schedule on 27 May.Such meeting shall determine IPO schedule and IPOs price. We target to list our stock on 20 June, yet, the final decision depends on Bapepam-LK, said Olivia.Metland plans to dispose 2.27 billion stocks or 30% of the total shares at IDR240-IDR300 per unit. PT Danareksa and PT DBS Vickers Securities shall act as underwriter. (t02/wiw)