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NEWS UPDATES Asean Affairs   28  December 2010

Indonesian firms raise $11.4b from stock market

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Indonesian companies have successfully taken advantage of this year's bullish stock and debt markets by collecting more than Rp 100 trillion for business expansion, as Southeast Asia's largest economy continues to grow, latest data shows.

According to the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK), local companies collected a total of Rp 103.26 trillion (US$11.46 billion) from initial public offerings (IPOs) and rights and bonds issuances as of the third week of December, from December 13 to 17.

Twenty-two firms earned Rp 29.3 trillion from IPOs, nearly an eight-fold increase from the Rp 3.72 trillion made in 2009 in IPOs. However, the number of IPOs is less that the 25 projected by the Indonesian Stock Exchange (IDX).

The biggest gain by an IPO in 2010 was by instant noodle maker Indofood CBP, a wholly owned subsidiary of the largest food producer in the country, Indofood Sukses Makmur. Indofood CBP raised Rp 6.29 trillion in its October offering and nearly doubled the total 2009 IPO value.

Other newcomers include Borneo Lumbung Energi & Metal (Rp 5.17 trillion), state-run Krakatau Steel (Rp 2.81 trillion) - the country's largest steel maker, coal mining company Harum Energy (Rp 2.6 trillion), property firm Agung Podomoro (Rp 2.24 trillion), regional development bank Bank Jabar Banten (Rp 1.45 trillion) and state construction firm Pembangunan Perumahan (Rp 581.83 billion).

IDX president director Ito Warsito targeted another 25 newcomers to the stock exchange next year, with state flag airline Garuda Indonesia and cosmetic distributor Martina Berto, a subsidiary of cosmetics giant Martha Tilaar, set go public in the beginning of 2011.

Rp 38.56 trillion was also raised by 27 companies from the sales of their rights shares, more than four times last year's total rights issue value of Rp 9.32 trillion.

State-owned Bank Negara Indonesia, the nation's fourth largest bank, launched the biggest rights issue of the year, collecting Rp 10.46 trillion in December. Bakrie firms also collected big funds from issuances of rights shares this year, with Bakrie Sumatra Plantations earning Rp 4.96 trillion and Bakrieland Development another Rp 3.19 trillion.

Twenty-four companies also made Rp 35.4 trillion through bond issuances in 2010, a moderate 30 per cent increase compared to last year's Rp 27.21 trillion.

State-owned telephone company, the largest in the country, Telekomunikasi Indonesia (Telkom), Lembaga Pembiayaan Ekspor Indonesia (Indonesia Eximbank) and Bank Panin Indonesia each issued the biggest bonds of the year, at Rp 3 trillion.

Banks and other financial institutions dominated the 2010 bond issuances. Out of 24 firms, 18 launched bonds, including Bank CIMB Niaga (Rp 2.98 trillion), Bank Danamon Indonesia (Rp 2.8 trillion) and Bank Tabungan Negara (Rp 1.65 trillion), among others..

Foreign investors, controlling about 60 per cent of the nation's stock market, have helped the index reach historic highs this year, pumping a net Rp 19.38 trillion into the market as of December 17.

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