09 July 2013, 3 Firms Defy IDX Trend With Strong Trading Debuts

In stark contrast to the benchmark stock index, three companies posted strong gains in their Indonesia Stock Exchange trading debut on Monday, as investors scraped gains amid a bearish market.

Bank Mestika Dharma, a Medan-based bank, Victoria Investama, a financial holding company, and Multipolar Technology, an IT solution company, listed their stocks on Indonesia Stock Exchange (IDX) on Monday after initial public offerings in recent weeks.

Bank Mestika gained 13 percent to Rp 1,560, while Victoria surged 68 percent to Rp 210 and Multipolar jumped 50 percent to Rp 720. The gains contrast with the benchmark Jakarta Composite Index, which slid 3.7 percent for the day.

“All three companies’ share prices are nominally quite small. So investors see that there are potential for capital gains,” Reza Priyambada, head of research at Trust Securities, told the Jakarta Globe on Monday.

He said companies in the sectors represented by the new listings — finance and IT — had good growth potential.

“Bank Mestika is still a mid-sized bank, which leaves a lot of room for them to expand. The IPO funds can help growth in lending and in [the provision of] third-party funds,” Reza said.

The owner of Bank Mestika sold 430 million shares, or 10 percent of its holding, in an IPO last week, raising Rp 593 billion ($59.3 million).

The bank is aiming to increase lending by 15 percent this year to Rp 5.9 trillion, focusing its lending on small- to medium-sized businesses in Sumatra.

Victoria Investama raised Rp 150 billion by selling a 16 percent stake. The company will use the proceeds to repay debt and help finance expansion of its subsidiaries. It controls Victoria Insurance (a general insurer), Victoria Securities Indonesia (a brokerage) and Bank Victoria International.

Multipolar Technology sold 20 percent of its shares in an IPO and generated Rp 180 billion in fresh funds. The company will use the funds to help it build an office building and buy hardware to be outsourced to corporations in Jakarta.

Wellianto Halim, a director at Multipolar, said IT spending in Indonesia is expected to grow by 46 percent in the next three years. The growth is especially expected in banking sector as local banks invest heavily on their e-banking services.

Multipolar Technology and the Jakarta Globe are affiliated with Lippo Group.

The firms bring to 23 the number of companies newly listed on the IDX in 2013, edging close to the bourse’s target of 30 new listings for the year.