Over the past week shares of Indonesian securities brokerage company Minna Padi Investama Sekuritas surged drastically from IDR 408 to IDR 985 a piece, a whopping 141 percent rise. What is behind this impressive performance?
Although publicly listed Minna Padi Investama Sekuritas' net profit indeed climbed from a net loss of IDR 388.6 million in the first half of 2016 to IDR 32.2 billion (approx. USD $2.4 million) in the January-June 2017 period, its improving corporate earnings report cannot be the reason for the massive share performance.
What likely is the reason behind the remarkable share performance are rumors - circulating in Indonesian media - saying Minna Padi Investama Sekuritas will acquire a majority stake in Bank Muamalat Indonesia, a bank that is known as being the pioneer of sharia banking in Indonesia.
Rumors are that Minna Padi Investama Sekuritas will acquire a 75-80 percent stake in Bank Muamalat Indonesia for the price of USD $700 million. The acquisition is expected to be announced publicly in August 2017. Currently, management of the brokerage is unwilling to comment on the rumors.
However, if these rumors are indeed true, it is unclear how Minna Padi Investama Sekuritas will finance the acquisition. Based on the latest corporate earnings report of Minna Padi Investama Sekuritas its cash reserves were only IDR 17.9 billion (approx. USD $1.4 million) and it had IDR 478.4 billion worth of assets. Meanwhile, Bank Muamalat's total equity and assets were IDR 3.7 trillion and IDR 55.9 trillion, respectively, per May 2017.
Shareholders of Bank Muamalat Indonesia (per 31 July 2017):
|Islamic Development Bank||32.74%|
|Atwill Holdings Limited||17.91%|
|National Bank of Kuwait||8.45%|
|IDF Investment Foundation||3.48%|
|BMF Holdings Limited||2.84%|
|M Rizal Ismael||2.34%|
|Koperasi Perkayuan Apkindo-MPI||1.39%|
|Andre Mirza Hartawan||1.18%|
|Badan Pengelola Dana ONH||1.03%|
Source: Bank Muamalat Indonesia
Previously, various other companies were interested to purchase a stake in Bank Muamalat Indonesia, including Bank Rakyat Indonesia (BRI), Bank Permata, Bank Mega, Bank Mandiri, Standard Chartered Bank, Qatar Islamic Bank SAQ, and ING Baring Bank.
On Monday (31/07) shares of Minna Padi Investama Sekuritas rose by 24.68 percent to IDR 985 a piece. So far this year the company's shares have surged 106.93 percent.
Stock Quote Minna Padi Investama Sekuritas - PADI: