JAKARTA: The initial public offering of property company PT Metropolitan Land Tbk (Metland) has been predominantly subscribed by foreign investors, especially those based in Singapore.PT Nikko Securities Indonesia Investment Banking Director Widya Bharata said that the subscription from foreign investors reached IDR270 billion of the IDR455 billion total offered shares.Of the total IDR455 billion offered shares, we helped to sell IDR300 billion, while the rest were handled by Danareksa Sekuritas. Three main investors we offered the shares to are from Singapore and all of them are private equities, he said yesterday.Domestic investors only subscribed to 10% of the IDR300 billion shares that Nikko Securities offered. They were mostly mutual funds and insurance companies. Nikko Securities and PT Danareksa Sekuritas acted as the underwriters of Metland IPO. Nikko replaced PT DBS Vickers Indonesia, which backed down citing a business risk reason.Metland is a developer of houses, malls and hotels focusing on the upper-middle, middle, and lower-middle class in the Greater Jakarta.Danareksa Investment Banking Director David Agus said that the company had a mandate to help sell IDR155 billion worth shares of the total on offer to both individual and institutional investors.David revealed that 80% of the initial subscriptions were made by institutions, while the rest were taken by individual investors.He said both institution and individual investors subscribing Metland shares were domestic investors.David explained that in marketing Metland shares, the underwriter was focusing on the long-term investors, which have interest in property companies, whose share price do not tend to fluctuate.Our strategy is to target long-term investors because Metland's business model comes from recurring income and residential. The residential depends on the price of land. It means that the ones who are interested in buying are those who are willing to wait in seeing the prices to rise.He admitted that market response for property shares is not as big as that for mining companies and consumer goods manufacturers.The property developer under Metropolitan Group has set share price at IDR240, after being estimated between IDR240-IDR300 per share.DBS Vickers Securities Director Rudi Budiarjo said that Metland shares were appropriate for domestic investors and were offered through private placement.We quit because Metland IPO is more appropriate for domestic investors, meaning that foreign investors give less response to the plan. The most appropriate mechanism is private placement, he said. (18/M. Tahir Saleh) (t04/msw)

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