IDR14.5 trillion of rights issue funds pour market

JAKARTA. Three months ahead of the end of 2016, Indonesia Stock Exchange (IDX) will be still vibrant with rights issues. Issuers seem to use the momentum of Jakarta Composite Index or JCI’s rise during the end of the year.

Deputy Commissioner of Stock Exchange Supervisor II at Financial Service Authority Noor Rachman said that nine issuers have proposed to conduct right issues with IDR14.5 trillion of emission targets.

Three State Owned Enterprises become major issuers in the future rights issues, namely PT Wijaya Karya Tbk (WIKA), PT Krakatau Steel Tbk (KRAS), and PT Jasa Marga Tbk (JSMR) with the target of funds of IDR6.1 trillion, IDR1.87 trillion, and IDR1.78 trillion, respectively.

For the rights issues, WIKA has set the price for every share at IDR1,525 to IDR2,505. Most of the obtained funds will be allocated to government infrastructure projects.

Aside of construction issuers, banking sector will also participate in the rights issues. For an example, PT Bank Mayapada International Tbk (MAYA) targets to reap IDR1 trillion from the rights issues.

Analyst at Danareksa Sekuritas Lucky Bayu Purnomo suggested that investors seem to target more to shares of infrastructure and construction issuers. He also suggested investors to start collecting shares of  the State Owned Enterprises that will conduct rights issues.

Head of Research Department at Koneksi Capital Alfred Nainggolan said that investors adapt wait and see stance over the issuers with low shares valuation. Therefore Alfred predicted that investors will be more attracted to State Owned Enterprises’ shares, on the grounds that the shares will have steady growth rate in a long term. Alfred also suggested investors not to buy shares from issuers with low liquidity value. (Translator: Muhammad Farid)