The Indonesia Stock Exchange (IDX) expects to see 15 more companies conducting an initial public offering (IPO) on the local bourse in the remainder of the year, supported by the improving macroeconomic indicators of Indonesia (including a 5.18 percent y/y GDP growth pace in Q2-2016, 2.78 percent y/y inflation in August, and the central bank's lower interest rates) as well as the tax amnesty program (that should bring home trillions of rupiah, part of which finds its way into the local stock market). However, looming tighter monetary policy in the USA remains a challenge.
So far this year the number of companies that decided to list on the Indonesia Stock Exchange has been disappointing. Only ten companies dared to list. Companies' reluctance to undertake an IPO in Indonesia in recent years was caused by bleak economic indicators of Indonesia (for example the economic slowdown that Indonesia experienced between 2011 and 2015) as well as the highly uncertain global context. Global uncertainties, which persist up to the present day, are caused by weaker-than-expected global economic growth and uncertainty about the timing of further monetary tightening in the world's top economy: the United States. Domestic uncertainties, on the other hand, are waning and this should make companies more confident to list on the IDX.
Changing perceptions about US monetary policy has caused a roller-coaster ride in global financial markets: when investors believe a US interest rate hike will be delayed, billions of US dollars flow into emerging markets (including Indonesia), but when there are signals that the US Federal Reserve will act soon to hike its Fed Funds Rate, then these billions of US dollars leave the emerging markets. This volatile roller-coaster ride has been going on for several years now and makes companies hesitant to list even though recent IPOs in Indonesia still show plenty of investor appetite, provided the financial fundamentals of the company are sound.
Over the past couple of days, fears about a sooner-than-expected US interest rate hike have eased after US jobs data showed that only 151,000 jobs were added to the American economy in August 2016. This figure is regarded not strong enough to be able to result in an interest rate hike later this month at the Federal Reserve's monthly policy meeting. However, one hawkish statement from a Federal Reserve official can immediately change these sentiments. But even in case the Federal Reserve raises its key interest rate the negative impact on Indonesia (capital outflows) will only be temporarily.
Companies Expected to IPO on Indonesia Stock Exchange before End-2016:
|% of total
|Waskita Beton Precast||10.5 billion||40%||IDR 450||IDR 4.7 trillion|
|Anugerah Berkah Madani||3.33 billion||25%||IDR 450||IDR 2.9 trillion|
|Aneka Gas Industri||767 million||25%||IDR 1,145||IDR 877 billion|
|Paramita Bangun Sarana||300 million||20%||IDR 1,200||IDR 325 billion|
|Mayapada Properti Indonesia||-||17.6%||-||-|
|Megapower Makmur||300 million||30.9%||-||-|
|Indo Komoditi Korpora||(relisting)||-||-||-|
Source: Investor Daily
Indonesia's tax amnesty may get some momentum (after a weak start) as several big local businessmen (billionaires) have expressed their support and participation in the program. This may convince other "big fish" and many smaller businessmen to follow suit. Fund repatriations are expected to flow (primarily) into Indonesia's property sector, bonds and stock market. This should be an incentive for companies to decide to list on the IDX. And - even without the support from the tax amnesty program - IPOs in Indonesia are usually oversubscribed due to plenty of demand.
There are now 535 companies listed on the Indonesia Stock Exchange, a figure much lower compared to neighboring countries Singapore (769 listed companies), Thailand and Malaysia. However, given that Indonesia is Southeast Asia's largest economy and there are signs that President Joko Widodo's reform programs will finally be able to push for higher (and long-term) economic growth, the nation targets to become the biggest stock market of the ASEAN region by the year 2020 (both in terms of number of listed companies and transaction value).
Last Update: 29 Mar 2021
IPOs on Indonesia Stock Exchange in 2016
|Company||P: 29 Mar 2021||P: 28 Mar 2021||Gain/Loss||P/E ttm||Yield %||Gain/Loss YTD|
|Bank Artos IndonesiaARTO||10,050||9,900||1.52%||N/A||0.00%||79.46%|
|Mahaka Radio Integra Tbk.MARI||256||254||0.79%||N/A||0.00%||187.64%|
|Bank Ganesha Tbk.BGTG||146||156||-6.41%||N/A||0.00%||102.78%|
|Cikarang Listrindo Tbk.POWR||700||695||0.72%||N/A||0.00%||-12.50%|
|Sillo Maritime Perdana Tbk.SHIP||655||645||1.55%||N/A||0.00%||-5.07%|
|Duta Intidaya Tbk.DAYA||258||264||-2.27%||N/A||0.00%||-35.18%|
|Graha Andrasentra Propertindo Tbk.JGLE||50||50||0.00%||N/A||0.00%||0.00%|
|Protech Mitra Perkasa Tbk.OASA||338||326||3.68%||N/A||0.00%||-1.17%|
|Capital Financial Indonesia Tbk.CASA||384||384||0.00%||N/A||0.00%||6.08%|
Green colour indicates upward movement
Red colour indicates downward movement
P = price; E = earnings; D = dividend; Yield = D/P
"N/A" indicates P/E < 0 (negative earnings)
"-" indicates E,D,P or YTD is not available