Although the number of IPOs is predicted to be still small in 2012, yet it will not significantly the affect stock and bond markets as well as the future of the country`s mutual funds industry.
Jakarta (ANTARA News) - Many analysts have predicted that the initial public offering (IPO) market in 2012 will remain relatively gloomy, but the number of firms conducting IPOs is expected to increase next year.

According to Deputy Director of the Indonesian Stock Exchange (BIE) Eddy Sugito, the Indonesian Stock Exchange Market (BEI) has predicted that the number of companies to float their shares through the initial public offering in 2012 will increase from that in 2011.

The BEI has set itself a target of 25 companies to conduct IPO next year, just the same as the target it has set for this year. However, Eddy was convinced the target could be exceeded in 2012.

Although the number of IPOs is predicted to be still small in 2012, yet it will not significantly the affect stock and bond markets as well as the future of the country`s mutual funds industry.

"Several quarters have predicted the IPOs in 2012 would not be too high as a result of global financial crisis in Europe that would in turn affect the stock markets, yet it would not affect too significantly the country?s mutual funds industry," President Director of PT Panin Asset Management, Winston Sual said.

The company is of the view that mutual funds business is at present done with various management systems so that it was predicted that mutual funds would still experience growth in 2012. "Mutual funds business is still expected to reach an average yields of 20-25 percent," he said.

However, in line with its growth from year to year mutual funds industry needed more varied instruments. Therefore, PT Panin hoped that many more companies would float their shares through the IPO mechanism in 2012 so that mutual funds industry could be boosted to a better development.

The same view was also shared by another director of the Panin, Ridwan Soetedja. He said that the projection of small number of companies going IPO in 2012 would not affect mutual funds business.

He predicted that although the number of those offering IPO shares, the number of firms issuing bonds would be big. "In 2012 bonds issuance is expected to be dominant than IPO offering in line with the lowering of the central bank?s benchmark interest rate to the six percent level," Ridwan said.

Earlier, the Indonesian Stock Exchange Market (BEI) has predicted that the number of companies to float their shares through the initial public offering (IPO) in 2012 will increase from that in 2011.

"We will see the market position in January next month. Usually, at the beginning of the year, many market players would refresh and restructure their portfolio and assets. If this process shows positive results, I am convinced the number of companies floating their shares through the IPO mechanism will be bigger in 2012," Eddy Sugito, BEI director for assessment and stock-staking affairs, said on Tuesday.

He said that fluctuations of global and domestic stock markets over the past several months would cause companies to delay carrying out IPO this year-end.

PT Makinta Securities for example will handle the IPO of two issuers in the first semester of 2012. The two companies, which are active in the consumer and property business, have delayed their IPO from 2011 to 2012 due to less encouraging market this year.

"Initially, the two would IPO issuers have plans to go public this year but seeing the market condition which was still discouraging, they delayed the plan until next year," Director of Makinta Securities Made Mindi Wijaya, said.

Based on this assumption, he said, the number of companies offering their shares through the IPO mechanism would be bigger than the previously assumed in 2012.

Despite that fact, the BEI has no intention yet to change its previous prediction on the number of companies carrying out IPO in 2012, namely 25 companies. The IPO target has been set in the extraordinary public meeting of share holders (RUPSLB) of BEI on October 26, 2011.

In the meantime, BEI`s target of 25 issuers this year, Eddy said that he was optimistic that it could be achieved even if the stocks market was facing turbulence conditions.

"At present, we acknowledge that only 22 new share issuers have been recorded. We have another one which will soon be on listing namely PT Erajaya Swasembada," Eddy said.

He said that actually there were two other firms which had been ready to go IPO at the end of this year. Information on their plans to float shares could be obtained from the Capital Market and Financial Institutions Supervisory Board (Bapepam-LK) in the coming two weeks.

"We can still expect that they are listing this year. If that happen, our target to have 25 issuers this year could be achieved," he said.

He said that two companies which were ready to list their shares to the stock exchange were PT Saranacentral Bajatama and PT Greenwood Sejahtera .

Since early this year, 22 firms have been listed to go IPO in the stock exchange, and PT ABM Investma was the 22nd to be listed.

In the first trade, ABM Investama was able to raise the price of its share to the Rp4,100 position with a transaction volume of 2,557 shares worth Rp6.72 billion. The company floated a total of 55,633,000 shares (20 percent) to the public at a price of Rp3,750 per share with a total IPO value of Rp2.065 billion.

Of the funds obtained through the IPO, 70 percent will be used for business expansion, 24 percent for mining acquisition debt financing and the remaining one is for working capital.

ABM Investama Strategic Director Yovie Priadi said his company had set a net profit growth target this year of 359-400 percent. The growth was expected to be boosted by the company`s income which increase by about 40 to 50 percent.(*)

Reporter: By Andi Abdussalam
Editor: Heru Purwanto
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