A total of six Indonesian companies are expected to conduct an initial public offering (IPO) on the Indonesia Stock Exchange (IDX) in December 2014. Today (Wednesday 03/12), shipping company Soechi Lines made its trading debut, raising around IDR 582.5 billion (USD $48 million) by offering 1 billion new shares, or 15 percent of the company’s enlarged capital, to the public. The company’s shares surged as much as 27 percent after the opening. It was the 20th company to list on the IDX in 2014.
Go Darmadi, President Director of Soechi Lines, said that 55 percent of the proceeds will be used to buy new ships, 30 percent to pay off debts of its subsidiaries, and the remaining 15 percent for working capital of its subsidiaries.
Soechi Lines, established in 1977, is an Indonesia-based company engaged in marine transportation as well as hotel management in Medan (North Sumatra), and owns a shipyard in Karimun Island (located close to Singapore and Batam). Soechi Lines currently owns a fleet of 33 ships (including oil tankers, chemical tankers, and gas carriers).
The successful trading debut of Soechi Lines signals that there is plenty of interest in Indonesian stocks after political uncertainties (brought about by the fragmented outcomes of Indonesia’s legislative and presidential elections in 2014) have eased and the new Joko Widodo-led government has showed its commitment to implement structural reforms in a bid to boost economic and social development in Southeast Asia’s largest economy. One example of this commitment was the recent subsidized fuel price hike. On 18 November 2014 subsidized fuel prices (low-octane gasoline and diesel) were raised (a move which implies political and social risks in Indonesia) by over 30 percent in order to relieve pressures on the government budget deficit and the current account deficit, as well as to reallocate government spending from fuel consumption to structural sectors such as infrastructure, agriculture, education and healthcare. Widodo targets to push economic growth back to +7 percent year-on-year by 2019 through structural reforms. If realized, this would fuel appetite for Indonesian stocks as well as for more IPOs to be conducted on the IDX. In the third quarter of 2014, Indonesia's GDP growth fell to a five-year low of 5.01 percent (y/y).
However, higher subsidized fuel prices also resulted in Bank Indonesia’s decision to raise its key interest rate (BI rate) by 25 basis points to 7.75 percent in November 2014, a relatively high interest rate, implying that, from a sectorial point of view, stocks of banks and other financial institutions will have difficulty to gain. Moreover, amid continued weak external demand, companies focused on commodities also still have a bleak outlook. Lastly, Indonesia may be hit by severe capital outflows after the US Federal Reserve announces to raise its key interest rate. US interest rates are expected to raise in the second or third quarter of 2015.
President Widodo has repeatedly emphasized that he intends to focus on development of the maritime sector. This makes stocks of Soechi Lines attractive as the company can benefit from the country's new development targets in the maritime sector. Furthermore, with a price to earnings ratio of between 7.9 and 10.5 times, Soechi Lines' shares are attractive (the average P/E ratio in Indonesia's shipping sector is 9 times). In the first six months of 2014, Soechi Lines posted a 18.3 percent growth (y/y) in revenue to USD $54.7 million, while net profit increased 52.9 percent (y/y) to USD $15.6 million over the same period.
Planned IPOs on the Indonesia Stock Exchange in December 2014:
|Company|| Shares to be
|Soechi Lines||15%||IDR 582.5 billion||3 December 2014|
|Intan Baruprana Finance||40%||IDR 520-640 billion||4 December 2014|
|Archi Indonesia||40.4%||IDR 3.0-3.9 trillion||15 December 2014|
|Impack Pratama Industri||40%||not available||17 December 2014|
|Bank Agris||20%||IDR 94.5-103.5 billion||22 December 2014|
|Golden Plantation||21.8%||IDR 200-240 billion||23 December 2014|
Source: Investor Daily
If realized, these six IPOs would bring the total number of IPOs on the IDX in 2014 to 25, and the total number of companies listed on the IDX to 508 (a low figure compared to its regional peers). Ito Warsito, Director of the IDX, said that he expects 32 companies to list on the IDX in 2015.
Last Update: 29 Mar 2021
IPOs on the Indonesia Stock Exchange up to 3 December 2014
|Company||P: 29 Mar 2021||P: 28 Mar 2021||Gain/Loss||P/E ttm||Yield %||Gain/Loss YTD|
|Bank Panin SyariahPNBS||83||82||1.22%||N/A||0.00%||-4.60%|
|Asuransi Mitra Maparya Tbk.ASMI||925||930||-0.54%||N/A||0.00%||-6.57%|
|Bank Ina Perdana Tbk.BINA||1,560||1,550||0.65%||N/A||0.00%||64.21%|
|Capitol Nusantara Indonesia Tbk.CANI||186||186||0.00%||N/A||0.00%||22.37%|
|Tunas Alfin Tbk.TALF||310||258||20.16%||N/A||0.00%||13.97%|
|Bali Towerindo Sentra Tbk.BALI||700||690||1.45%||N/A||0.00%||-6.04%|
|Wijaya Karya BetonWTON||334||344||-2.91%||N/A||0.00%||-20.85%|
|Graha Layar PrimaBLTZ||4,600||4,650||-1.08%||N/A||0.00%||53.85%|
|Intermedia Capital Tbk.MDIA||63||66||-4.55%||N/A||0.00%||3.28%|
|Eka Sari Lorena TransportLRNA||180||185||-2.70%||N/A||0.00%||1.69%|
|Magna Finance Tbk.MGNA||50||50||0.00%||N/A||0.00%||0.00%|
|Batavia Prosperindo Internasional Tbk.BPII||7,300||7,300||0.00%||N/A||0.00%||-15.12%|
|Sitara Propertindo Tbk.TARA||50||50||0.00%||N/A||0.00%||0.00%|
|Bank Dinar Indonesia Tbk.DNAR||196||210||-6.67%||N/A||0.00%||6.52%|
|Blue Bird GroupBIRD||1,345||1,335||0.75%||N/A||0.00%||-9.73%|
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