BRI head office stormed by buyers<\/p>\n
Rendi A Witular, The Jakarta Post, Jakarta<\/p>\n
Despite a modest promotion campaign, state Bank Rakyat
\nIndonesia (BRI) attracted a huge crowd on the first day of its
\nshare offering to the public on Wednesday.<\/p>\n
Hundreds of the bank's customers stormed the bank's head
\noffice from the early morning, struggling to get a small chunk of
\nthe bank.<\/p>\n
The queue of customers outside the bank's head office on Jl.
\nSudirman, South Jakarta stretched across the building's front
\nyard and along the street.<\/p>\n
Indra, a bank customer, said he arrived at the bank at 6:30
\na.m. and was surprised to find his name 60th on the waiting list.<\/p>\n
"The line in front of the bank was long even before I arrived.
\nOne person even arrived here at midnight," he said as quoted by
\nDetik.com.<\/p>\n
He said the situation became frantic and tense from 8 a.m. to
\n10 a.m. when more people came and started jostling people. Some
\npeople were disappointed at finding they were not able to buy as
\nmany shares as they had intended.<\/p>\n
Only 10 people in front of the queue were able to buy the same
\nnumber of shares stated on their purchase orders.<\/p>\n
Indra said he could only buy 500 lots of shares or 25,000
\nshares with a nominal price of Rp 875 per share.<\/p>\n
The government is selling 30 percent of the country's fourth
\nlargest bank in terms of assets to the public via an initial
\npublic offering (IPO), in a bid to help plug the state budget
\ndeficit this year, which is estimated to reach Rp 34.4 trillion
\n(US$4.06 billion).<\/p>\n
Five percent of the total shares planned for the IPO have been
\nallocated for BRI customers. The shares were to be available from
\nOct. 22 to Oct. 29, but all the shares were sold on the first
\nday.<\/p>\n
The final pricing for the IPO will be decided on Oct. 28,
\nwhile the offering for members of the public who are not
\ncustomers of the bank is scheduled to take place from Nov. 3 to
\nNov. 5. The shares will be listed on the Jakarta Stock Exchange
\nand the Surabaya Stock Exchange on Nov. 10.<\/p>\n
"We did not expect the high demand. That's why we only
\nallocated 5 percent of the shares planned for the IPO," BRI
\ncorporate secretary Rochidayat Taepur told The Jakarta Post.<\/p>\n
He explained that the bank's customers still had an
\nopportunity to buy shares, but they should not expect to secure a
\nlarge number of shares as demand was high.<\/p>\n
He said that BRI's shares had been oversubscribed by more than
\n1.5 times.<\/p>\n
The BRI IPO has been launched without much fanfare, especially
\ncompared to state Bank Mandiri's IPO in June.<\/p>\n
Mandiri's management published huge advertisements in the
\nmedia to raise the interest of investors, both big and retail, in
\nthe stock sale.<\/p>\n
Furthermore, some marketing innovations were also introduced
\nas sweeteners for retail buyers. To mention a few, five luxury
\ncars were offered to lucky investors, on top of plans by the
\nbank's management to allocate 50 percent of its 2003 net profit
\nfor dividend payments to shareholders.<\/p>\n
However, despite the lack of promotion, BRI has apparently
\naroused more public enthusiasm. BRI's IPO price is set at Rp 700
\nto Rp 875 per share, higher than that set for Mandiri, which was
\nRp 569 to Rp 695 per share.<\/p>\n
Analysts said the higher price range could mean the government
\nwas more confident that the demand for BRI shares would be higher
\nthan for those of Mandiri.<\/p>",
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