Mandiri wraps up successful share sell-off<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Bank Mandiri, Indonesia's biggest bank, successfully closed
\nits three-day initial public offering (IPO) to local retail
\ninvestors on Friday with more than 700 million shares having been
\nsnapped up by close of business.<\/p>\n
Managing director of Danareksa Sekuritas Wahzari Wardaya told
\nThe Jakarta Post that the offering had been successful, with
\nrobust demand coming from local investors.<\/p>\n
"We still need time to calculate all the figures, but we
\nestimate that our allocation of shares for retail investors is
\nlikely to go beyond our expectations," said Wahzari.<\/p>\n
Danareksa is one of Mandiri's underwriters, along with ABN
\nAmro Asia Securities Indonesia and Credit Suisse First Boston
\nIndonesia.<\/p>\n
It is estimated Mandiri will rake in more than Rp 500 billion
\n(US$60.9 million) from the sale to retail investors, adding to
\nthe previous Rp 1.96 trillion raised from the sale of 2.9 billion
\nshares to institutional investors.<\/p>\n
As reported by Bloomberg on Friday, on the second day of the
\noffering Mandiri managed to make Rp 450 billion at a retail share
\nprice of Rp 655 per share, a 3 percent discount from the price
\nset for institutional investors of Rp 675.<\/p>\n
Mandiri president E.C.W. Neloe previously said that the IPO
\nwas 6.5 times oversubscribed with 24 billion shares having been
\nrequested by foreign investors and three billion by locals.<\/p>\n
Rumors circulating in the market say that big overseas
\ninvestment companies such as Schroders, Martin Currie, Morgan
\nStanley Asset Management, Handerson and Scottish Widows had set
\ntheir sights on large volumes of Mandiri shares.<\/p>\n
However, Mandiri's underwriters said that the identity of the
\ninvestors remained confidential.<\/p>\n
Bank Mandiri will list its shares on the Jakarta Stock
\nExchange on July 19.<\/p>\n
The Mandiri success story may well raise confidence regarding
\nthe government's plan to sell about 30 percent of the shares in
\nBank Rakyat Indonesia, the country's number four bank, and other
\nbanks such as Bank Negara Indonesia, Bank Lippo, Bank
\nInternasional Indonesia and Bank Permata. The last three banks
\nwere acquired by the government in the wake of the late 1990s
\nfinancial crisis.<\/p>\n
The government had set itself a target of earning Rp 2.7
\ntrillion from the sale of the 20 percent stake in Bank Mandiri.
\nAll of the proceeds will be used to help plug the state budget,
\ndeficit which this year may reach Rp 34 trillion.<\/p>\n
With the IPO, the government is also expected to recoup some
\nof the more than $66 billion in recapitalization funds it
\ndisbursed to rescue local banks in 1997-1998.<\/p>\n
Mandiri is the country's most heavily recapitalized bank,
\naccounting for 27 percent of the overall bailout funds injected
\ninto the banks to replace problem loans taken over by the
\nIndonesian Bank Restructuring Agency.<\/p>\n
A number of skeptical analysts have said that Mandiri was more
\nlike a bond fund rather than a bank as its assets were still
\ndominated by the recap bonds. Some 60 percent of the bank's
\nassets, worth Rp 260 trillion, take the form of recap bonds.<\/p>\n
Mandiri's IPO triggered further strengthening of the rupiah
\nagainst the U.S. dollar on Friday.<\/p>\n
The rupiah closed at Rp 8,185, up from Thursday's Rp 8,222.
\nDealers said some foreign banks in Jakarta sold dollars on behalf
\nof foreign investors buying Mandiri shares.<\/p>",
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