IDX cut IPO target

Jakarta. This year, Indonesia Stock Exchange (IDX) recorded sluggish Initial Public Offering (IPO) activities. Previously, IDX has revised down the target of companies involved in IPO from 35 companies to 25 companies. Recently, IDX once again revised down the target to only 20 companies.

Director of Transaction and Compliance Supervision at IDX Hamdi Hassyarbaini said that the condition is beyond the IDX’s control, on the grounds that the decision on issuing shares is on the issuer. "About 10 companies have cancelled (the IPO)”, he said. According to Hamdi, the issuer candidates tend to consider the market condition, “They will cancel the IPO if the circumstances are not favorable. IDX also cannot force them”, Hamdi added.

Previously, Director of Companies Assessment at IDX Samsul Hidayat said that there were six issuer candidates , which were in the pipeline, namely PT Prodia Widyahusada, PT Mayapada Properti Indonesia, PT Forzaland Indonesia, PT Bintang Auto Global (the owner of Honda dealers in Malang, East Java), PT Anugerah Berkah Madani (ABMA Properties), dan PT Megapower Makmur.

However, currently only four issuer candidates left in the pipeline, after ABMA Properties and Megapower Makmur cancelled the plan for IPO.

Information has it that Megapower Makmur cancelled the IPO due to the company’s internal problems, while ABMA rescheduled the IPO to 3 October 2016. However, to date there has been no news.

President Director of ABMA Land Musyanif once told KONTAN that the IPO was cancelled due to the issue between underwriter department wth the committee. Furthermore, ABMA has also settled yet the some technical processes.

Director of Investa Saran Mandiri Hans Kwee estimated that the sluggish activities of IPO were caused by some factors, including the stock market condition, which relatively slightly increased.

"The market tends to be ragging. Therefore the issuers wait for better moment in the next year for IPO. The index also does not move too fast, as (the shares prices) have been too expensive” Hans said.

Furthermore, the corporations also tend to more focus on tax amnesty at least until the end of 2016. Therefore, IDX may record fewer IPO activities by the end of this year. “The national economy is expected to improve in the next year. This will give opportunities for companies to launch expansion and conduct IPO”, Hans added.

In the first nine months of this year, there were 13 new issuers launched IPO and one issuer relisting on IDX. There were 15 companies launched IPO, while two other relisting on IDX during the same period in the last year. The records are much lower than in 2014 when 23 new issuers launched IPO and one relisting on IPO. In 2013, the IDX even recorded IPOs of 30 issuers.

(MUHAMMAD FARID/Translator).