Fresh funds will flood stock market

JAKARTA. Three months ahead of the end of 2016, Indonesia Stock Exchange (IDX) is likely to accept a large amount of fresh funds. At least nine issuers will issue rights shares in the fourth quarter of 2016. In total, the issuers may yield as much as IDR14.5 trillion from the right issues.

State Owned Enterprises (SOEs) such as PT Wijaya Karya Tbk (WIKA), PT Krakatau Steel Tbk (KRAS), PT Jasa Marga Tbk (JSMR), and PT PP Tbk (PTPP) target to raise IDR6.1 trillion, IDR1.87 trillion, IDR1.78 trillion, and IDR4 trillion of funds, respectively from the right issues.

In private sector, PT Bank Mayapada International Tbk (MAYA) targets to yield as much as IDR1 trillion of funds from the rights issues, while PT Bank Pembangunan Daerah Banten Tbk (BEKS) expects to gain IDR329.15 billion of funds from its fifth right issues.

Another issuer PT Siloam International Hospital Tbk (SILO) has set exercise price at IDR9,000 per a share to yield as much as IDR1,3 trillion of funds. Analyst at Panin Sekuritas Frederik Rasali said that SILO’s shares are worth to collect.

Analyst at Danareksa Sekuritas Lucky Bayu Purnomo suggested that construction and infrastructure sectors have positive prospects in the future. Therefore, investors may start collecting the SOEs’ shares for a short time and a long time period.

Meanwhile, Head of Research Department at Koneksi Capital Alfred Nainggolan favours the issuers with low valuations stocks that have consistent growth in a long time period. Alfred added that SOE issuers, such as WIKA and JSMR may be included under this category.

The rights issues are potentials to jack up Jakarta Composite Index or JCI’s market capitalization. Aside of the right issues, the market capitalization needs a conducive macroeconomic condition.

To date, stock exchange authority still maintains the target of IDR6,000 trillion JCI market capitalization by the end of this year. On Thursday (13/10), JCI booked a worth of IDR5,775 market capitalization, whereas the market capitalization on Wednesday (12/10) hit the level of IDR5,801.
The right issues and initial public offering (IPO) has led Indonesian Stock Exchange (IDX) to have higher market capitalization growth than JCI. On year to date basis, JCI only increased by 16.27%, while IDX grew by 18.25% compared with the latest position in 2015.

(Muhammad Farid/Translator)