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Tag: IDX

  • Indonesia Stock Exchange Opens More ‘Go Public Information Centers”

    Indonesia Stock Exchange Opens More ‘Go Public Information Centers”

    The new information service – Go Public Information Center – will present all necessary information to private firms about the steps and processes required to become a listed company in Indonesia (including information about underwriters). The center was first opened in Indonesia’s capital city of Jakarta (in June 2016), located at the ground-floor of the Indonesia Stock Exchange Building. Over the next couple of years the IDX plans to open information centers in 15 more cities.

    The IDX targets to see 35 companies conduct on IPO on the local bourse in 2016. However, this probably is a too ambitious target. So far this year only eight companies have been added to the IDX.

    Only 529 companies are listed on the Indonesia Stock Exchange (while there may be more than 60 million business units active in Indonesia; mostly small and medium sized enterprises). This figure is much lower compared to listed companies in Thailand (644), Singapore (766) and Malaysia (904). Being Southeast Asia’s largest economy, Indonesia is eager to top this ranking somewhere in the future. Meanwhile, in the advanced Asian nations, the number of listed companies is much higher.

    According to the IDX, costs of an IPO (paid to the bourse, auditors, underwriters, independent appraisers and legal counselors) is approximately 3.16 percent of the total funds raised in the IPO. Those companies that have existed for at least a year and have a minimum of IDR 5 billion (approx. USD $373,340) in net assets can undertake an IPO on the IDX. To make it more attractive to conduct an IPO, companies are offered several tax incentives, including a discount of income tax up to 5 percent.

    Advantages for a company to go public:

    • Generate fresh funds that can be used for business expansion or to pay off debt
    • Raise public awareness of the company/adding a new group of potential customers
    • Increase the company’s market share
    • Lucrative exit strategy for founding individuals
    • Improved management due to mandatory higher degree of financial and corporate transparency to the public

    Disadvantages for a company to go public:

    • Higher costs of complying with regulatory requirements
    • Adjust to a higher degree of financial and corporate transparency
    • “Market pressure” causes companies to focus on short-term instead of long-term growth

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  • IDX Expresses Optimism in Economic Growth

    IDX Expresses Optimism in Economic Growth

    The Indonesian Stock Exchange (IDX) expressed optimism that the companies listed on the IDX would provide positive results as the national economy was predicted to grow by above 5 percent.

    “In 2015, more than 75 percent of stock issuers at the IDX booked profits. Indeed, some of them in the commodity sector recorded somewhat significant drop. Meanwhile in 2016, we believe that the economic growth will be above 5 percent,” IDX president director Tito Sulistio said in Jakarta on Wednesday, April 13, 2016. Tito added that the Bank Indonesia (BI) rate cut to 6.75 percent and the potential of capital inflow following tax amnesty policy were among the factors that would support the national economic growth.

    “Hopefully, the tax amnesty [policy] will work. Therefore, it is expected that Indonesia will see a capital inflow of about Rp 3,000 trillion (US$220.6 billion) to build infrastructures that are important for the economy. The fund could also be invested in the capital market,” Tito explained.

    He promised that he would encourage domestic companies to obtain funds for expansion by, for instance, holding IPOs. Tito added that the IDX would call on state-owned companies to conduct privatization through the IPO mechanism.

    Earlier, IDX director of corporation assessment Samsul Hidayat said that a number of regional development banks planned to hold IPO in order to increase their capital and distribute credit to wider consumers. In addition to banks, Samsul revealed that a number of state-owned construction subsidiary companies, such as PT Waskita Beton Precast, mulled to hold an IPO.