BRI wraps up successful listing debut<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Shares in state-owned Bank Rakyat Indonesia (BRI) made a
\nfairly impressive debut on the Jakarta Stock Exchange (JSX) on
\nMonday, surging up 11 percent, which some say reflects investors'
\nstrong confidence in the bank.<\/p>\n
Investors who earlier failed to get enough of BRI shares from
\nthe initial public offering (IPO) rushed in, pushing the price up
\nto its highest point in early trading at Rp 1,100, or Rp 225
\nhigher from the opening price of Rp 875.<\/p>\n
However, profit taking trimmed down the surge in BRI shares to
\nRp 975.<\/p>\n
\"The increase in BRI shares reflects investors' confidence in
\nthe bank at a time when confidence in the country's economy has
\nalso started to improve,\" said Raden Perdede, chief economist at
\nDanareksa Research Institute.<\/p>\n
Raden expected that the BRI's impressive debut could help
\nrevive overall investor confidence in the country's banking
\nsector, especially in state banks, which got hit hard by the
\nrecent revelation of a major loan scam at publicly listed Bank
\nNegara Indonesia (BNI).<\/p>\n
BRI, the country's fourth largest bank in term of assets, has
\nmostly been involved in micro-financing, an area largely
\noverlooked by most banks, and it has become very profitable.<\/p>\n
BRI's president Rudjito said in a press conference that the
\nbank's net profit for this year was estimated to reach at least
\nRp 1.6 trillion, around 75 percent of which is expected from loan
\ninterest revenue.<\/p>\n
Of the bank's total Rp 43.6 trillion in outstanding loans as of
\nJune this year, 91.62 percent were channeled to micro-, small-
\nand medium-sized enterprises.<\/p>\n
Such loans have been proven to be low-risk in terms of default
\nrates compared to loan exposure to large corporations.<\/p>\n
BRI offered 41 percent of its stake in the country's largest
\nIPO since 1995 and the largest bank share issuance in Asia,
\noutside of Japan, this year.<\/p>\n
The IPO was 16 times oversubscribed, with foreign
\ninstitutional investors, from Asia, Europe and North America,
\ntaking 54 percent of the 4.5 billion shares on offer.<\/p>\n
Of the total Rp 4.17 trillion (US$490 million) proceeds raised
\nfrom the IPO, around Rp 2.67 trillion will help finance the 2003
\nstate budget deficit and the remaining Rp 1.5 trillion will
\nincrease the bank's capital base.<\/p>\n
Rudjito said that proceeds from the IPO, along with the US$150
\nmillion subdebt bonds it recently issued, could help lift the
\nbank's capital adequacy ratio (CAR) to 20 percent from 12.36
\npercent at present.<\/p>\n
BRI needed to maintain its CAR at the level of 20 percent in
\norder to expand its loans to farmers, fishermen, cattle breeders
\nand other small businesses.<\/p>\n
The Jakarta Composite Index, however, fell 1.1 percent to
\n620.070 due largely to the negative impacts from state-owned
\ntelecommunication firm PT Telkom (fears of losses after a new
\naudit) and the BNI problems. Analysts said BRI's shares saved the
\nindex from falling further.<\/p>\n
JSX president Erry Firmansyah said that BRI was among the five
\nlargest counters on the JSX in terms of market capitalization,
\nable to move the index up by 2.5 percent with a one-point climb
\nin its share price.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bri-wraps-up-successful-listing-debut-1447893297",
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