Investors absorbed PTPP and WIKA rights issue

JAKARTA. The rights issue if some state owned enterprises (SOEs) gained positive response from some investors. A construction issuer, PT PP Tbk (PTPP) has completed the pre-emptive rights issue in the recent times.

The management of PTPP said that the investors have bought up the new issued rights. “They were even oversubscribed,” said Corporate Secretary of PTPP Agus S. Kana, Friday (`16/11).

Agus also said that the rights issue have completed by 15 December 2016. As information, PTPP offered the shares with the price of Rp 3,250 per a share. In fact, the price of a PTPP share in the market stood at Rp 3,890 on one day earlier.

Agus said that the new released shares have been absorbed by the government and public investors so that there was no need for standby buyer.

Most of the funds derived from the rights issue have been absorbed by the company. It is expected that the all of funds obtained from rights issue can be allocated for business expansion.

PTPP is estimated to obtain Rp 4.4 trillion funds by releasing 1.3 billion shares.

Aside of PTPP, PT Wijaya Karya (WIKA) has also completed the rights issue. According to Financial Service Authority (FSA) and Indonesia Stock Exchange (IDX), foreign enterprises bought 9% of WIKA shares, while the retail investors absorbed 7% of the shares or 225.32 shares. The rest of shares were absorbed by local investors from the institutions of insurance, foundation, pension funds, and multi funds management.

Director of Investa Saran Mandiri Hans Kwee said that the state owned enterprises (SOEs) offered attractive prices for the investors during the rights issue. Let alone, participants of the rights issue were construction and infrastructure sectors. “The investors had positive view of infrastructure sector, as it will drive the economic growth,” Hans said.

After the rights issue, the leverage ratio of the SOEs will be declining. Therefore, the issuers will have opportunities to support the expansion in the next year. “After the rights issue, the shares prices tended to be declining. However, the prices of their shares have started rising,” Hans added.

Hans recommends ‘buy’ for PT Jasa Marga Tbk (JSMR), WIKA, and PTPPs stocks with the target of the prices of Rp 4,750, Rp 2,650, and Rp 3,950 per a share, respectively. Meanwhile, the prices are targeted to stand at Rp 5,700, Rp 3,175, and Rp 4,859 per a share.

The prices of a share of JSMR, WIKA, and PTPP were closed at Rp 4,510, Rp 2,500, and Rp 3,880 per a share on Friday (16/12).
(Muhammad Farid/Translator)