Today, Indonesian integrated fishery, marine product processing and cold storage company Dua Putra Utama Makmur will be listed on the Indonesia Stock Exchange (IDX), hence becoming the 13th company to have conducted an initial public offering (IPO) on the IDX this year. Previously it was reported that the IPO of Dua Putra Utama Makmur was oversubscribed 1.5 times, reflecting robust demand. Overall, however, the number of IPOs on the IDX has been disappointing in 2015. Next year is expected to be a better year.
The number of IPOs on the Indonesia Stock Exchange can still rise before the year-end as five companies are preparing their listings. These firms are fast-moving consumer goods company Kino Indonesia, construction firm Indonesia Pondasi Raya (Indopora), rice producer Buyung Poetra Sembada, boiler manufacturer Ateliers Mecanique D'Indonesie (Atmindo), and radio broadcast company Mahaka Radi Integra. However, even if these companies manage to become publicly-listed companies before the year-end, the total number of IPOs and re-listings on the IDX stands at a mere 20 this year, well below the initial target of the IDX to welcome 32 new listings in 2015.
This year global uncertain conditions have had a major impact on the performance of Indonesia's benchmark stock index (Jakarta Composite Index). Particularly the looming interest rate hike in the USA and China's economic slowdown triggered capital outflows from emerging markets, including Indonesia. Moreover, internally, negative sentiments were caused by the continuation of Indonesia's economic slowdown, the wide current account deficit, weak export performance, and the weak rupiah (due to aforementioned capital outflows).
So far this year, Indonesia's Jakarta Composite Index has been the second-weakest performer in the Asia-Pacific region, falling 13.5 percent since the start of the year. Only the benchmark index of Singapore performed worse (dropping 13.8 percent). As can be expected - given the weak commodity prices - the worst performing sectors on the IDX are the mining and agriculture sectors.
Due to improving macroeconomic conditions, easier regulations regarding IPOs on the IDX, and an expected rise of the Jakarta Composite Index to around 5,700 (from 4,500 points currently), we expect to see more IPOs in Indonesia in 2016. Particularly shares in the construction sector are estimated to strengthen on the back of the government's infrastructure push. Other sectors that are expected to perform well next year are the banking, property and consumer goods industries.
The country's Financial Services Authority (OJK) recently eased capital requirements for an IPO on the IDX, implying that smaller companies, controlling capital as low as IDR 5 billion (approx. USD $365,000), can now conduct an IPO. Moreover, the central bank is expected to cut its interest rate environment somewhere in 2016 (after the shock of the US interest rate hike has passed). This will improve conditions for companies. But the most important factor will be certainty about the US monetary policy. Over the past years, global markets have been plagued by high volatility due to uncertainty about the timing of the US rate hike and China's perceived hard landing. Although uncertainty about China will continue, uncertainty about the US monetary policy will disappear after the rate hike. Lastly, the Indonesian government has been making serious efforts to encourage economic growth through its seven economic policy packages (which include tax incentives and deregulation). The fruits of these packages should be felt next year.
The IDX targets to welcome 35 new listings in 2016.
Last Update: 30 Nov 2018
IPOs on the Indonesia Stock Exchange up to 7 December 2015
|Company||P: 30 Nov 2018||P: 29 Nov 2018||Gain/Loss||P/E ttm||Yield %||Gain/Loss YTD|
|Bank Yudha BhaktiBBYB||284||290||-2.07%||N/A||0.00%||-17.92%|
|Mitra Keluarga KaryasehatMIKA||1,590||1,510||5.30%||N/A||0.00%||-10.67%|
|Mitra Energi PersadaKOPI||740||740||0.00%||N/A||0.00%||0.00%|
|PP Properti Tbk.PPRO||115||125||-8.00%||N/A||0.00%||-39.15%|
|Mega Manunggal PropertyMMLP||525||520||0.96%||N/A||0.00%||-10.26%|
|Merdeka Copper GoldMDKA||2,840||2,840||0.00%||N/A||0.00%||26.79%|
|Bukaka Teknik Utama Tbk.BUKK||1,750||1,800||-2.78%||N/A||0.00%||12.90%|
|Garuda Metalindo Tbk.BOLT||975||985||-1.02%||N/A||0.00%||-2.99%|
|Anabatic Technologies Tbk.ATIC||850||880||-3.41%||N/A||0.00%||-2.30%|
|Binakarya Jaya Abadi Tbk.BIKA||214||214||0.00%||N/A||0.00%||-30.52%|
|Bank Harda Internasional Tbk.BBHI||170||167||1.80%||N/A||0.00%||53.15%|
|Victoria Insurance Tbk.VINS||86||89||-3.37%||N/A||0.00%||-54.74%|
|Mitra Komunikasi Nusantara Tbk.MKNT||195||200||-2.50%||N/A||0.00%||-26.14%|
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