0 Equity Raisings To Nearly Double This Year: IDX

Fund-raising from the equity market is expected to rise this year as companies seek to finance expansions in a robust economic growth environment, the Indonesia Stock Exchange chief said late on Wednesday. Ito Warsito, the Indonesia Stock Exchange (IDX) president director, said he expected Indonesian companies to raise Rp 50 trillion ($5.2 billion) in fresh funds from the equity market this year, up from around Rp 30 trillion in 2012. “All sectors in Indonesia are growing. 

They [companies] need to expand and seek fresh funds,” he said, adding that initial public offerings, rights offerings and private placement share sales can help companies raise funds. Last year, the IDX recorded a total of Rp 10.4 trillion from initial public offerings by 23 companies, including cigarette maker Wismilak Inti Makmur and state construction firm Waskita Karya. Companies also raised Rp 18.1 trillion from share sales in secondary offerings and private placements. Warrant sales amounted to Rp 1.64 trillion. 

For 2013, the IDX hopes to see 30 IPOs. “We’ll stick to 30 companies. We had the fourth one already, from a plantation company,” Ito said, referring to palm oil company Multi Agro Gemilang Plantation, which sold four billion new shares, equal to 44 percent of the company’s enlarged capital. The IPO price was set at Rp 110 per share and Multi Agro raised Rp 440 billion, of which the proceeds will be used to refinance its debts and expand its business. If equity sales are combined with bond sales, Ito said Indonesian companies can raise more than Rp 100 trillion this year. 

Last year, there were 52 companies that raised Rp 76.3 trillion in total from selling bonds and asset-backed securities. Meanwhile, Ito said the IDX expected the Financial Services Authority (OJK), which at the start of the year assumed the role of the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK), to release supporting regulations for global companies who want to sell on the IDX. Indonesian companies are allowed to list their shares overseas, but there is no legal framework that regulates companies incorporated overseas that want to list their shares on the IDX. 

“We want to enlarge the size of our stock market with help from companies incorporated overseas. Many have shown interest. This can help boost the market capitalization and liquidity,” Ito said. Among those companies interested is CIMB Group Holdings, Malaysia’s second-biggest lender after Maybank. CIMB seeks to list its shares on the IDX, though it is so far only listed on the Malaysian bourse. At the end of stock trading on Dec. 28, Ito said the IDX was aiming for the market capitalization of companies listed on the exchange to grow to $750 billion in 2015, on the back of more share listings by companies and more investors tapping the local equity market. The Jakarta Composite Index closed 2012 at 4,316.69, gaining 13 percent from 2011. The JCI fell 0.3 percent on Thursday, closing at 4,398.38.

source : the jakarta globe