The increasing inflow of foreign (direct) investment in Indonesia confirms foreign confidence in the country's economy. Amid ongoing global economic uncertainty investors are looking for investment opportunities that are relatively stable and secure. Indonesia is one of such places as this emerging country still has ample room for growth and is not too dependent on international conditions. Of course, weak global demand has reduced profitability for Indonesian companies engaged in the nation's commodity industries but strong and continued domestic consumption has been the main pillar of annual economic growth of over six percent in recent years. Considering that Indonesia's large population is expanding in terms of per capita GDP (and - not unimportantly - contains much room for expansion as a significant part of the population constitutes the lower middle class segment), this pillar will remain a reliable factor in the foreseeable future. Indonesian companies of which the core business is focused on the people's consumptive behavior (or industries closely related to it) have experienced remarkable growth in recent years, such as food and drinks, automotive, banking, real estate, or cement. These industries are closely connected as the purchase of a car is often realized through a bank loan, or, cement is needed to build a house, which is purchased by an end-user through a mortgage from a bank.

With this increased foreign investment in mind, Indonesian companies are now more willing to conduct an initial public offering (IPO) on the Indonesia Stock Exchange (IDX) to raise funds for business expansion. In this field there is also still much room for growth. Currently, less than 500 companies are listed on the Indonesia Stock Exchange, whereas the New York Stock Exchange has over 2,000 listed companies.

In Q1-2013, seven Indonesian companies conducted an IPO on the Indonesia Stock Exchange and reaped a combined IDR 2.15 trillion (USD $221.6 million) in funds, while for the remainder of this year 21 companies are planning to conduct one.

Planned IPOs in 2013

Company Sector
Bank Mestika
Semen Baturaja
Saratoga Investama Sedaya
Acset Indonusa
Electronic City Indonesia Electronics
Austindo Nusantara Jaya Food/Energy
Mitra Pinastika Mustika Automotive
Dharma Satya Nusantara Palm Oil/Wood
Nusa Raya Cipta Infrastructure
Multipolar Technology Information Technology
Bank National Nobu Banking
Siloam Hospitals Group Healthcare
Eka Sari Lorena Transport
Bank Muamalat Indonesia Banking
Bank Mitraniaga Banking
Sriboga Ratu Raya Wheat Flour
Wika Beton Concrete
Delta Mas Wheels
Dutapalma Nusantara Palm Plantation   
Garuda Maintenance Facility AeroAsia Aviation
Air Asia Aviation

Source: Investor Daily