Bank Mandiri shares offering helps support local currency
Bank Mandiri shares offering helps support local currency
Dadan Wijaksana, The Jakarta Post, Jakarta
The rupiah hit 8,200 early on Thursday on capital inflows
linked to Bank Mandiri's initial public offering (IPO), although
dollar buying from importers and firms paying maturing foreign
debts strained the unit's progress to close at 8,222 per dollar.
"In early trading, there was strong demand for rupiah, most
likely from foreigners converting their funds to purchase local
assets, notably the shares in Mandiri.
"But, after the rupiah reached 8,200, companies then rushed in
buying dollars for both imports and debts payments," a dealer at
local brokerage said.
Nevertheless, the closing marked the rupiah's rise for the
fourth consecutive day, which dealers credited to foreign
investors' high demands for local assets currently on offer,
notably the shares of Mandiri.
The government is putting on the table 20 percent of Mandiri's
stake, with Friday the last day of the share offering which
started on Wednesday.
The dealer said the upward movement of the rupiah in recent
days should confirm high demands for Mandiri -- the largest bank
in the country.
A researcher from a state-owned bank agreed, saying that a
relatively quiet day seen on the first day of the offering did
not represent the actual demand.
"From what I've heard, demands for the IPO are actually good,
especially from institutions both local and foreign," he said,
without mentioning the names of the institutions.
On Wednesday, the offering's first day, only a few walk-in
investors were seen at the office at Bapindo Plaza complex, where
Mandiri opened its only registration counter in Jakarta. The
other counter for walk-in investors is in Surabaya.
Some people speculated that the IPO had failed to attract
investors.
"There might be just a few people coming to the counter, but
they are all retail investors, rather than those representing
institutions, which I think will prove to become the main
buyers," he added.
Rumors circulating around the market say big companies, both
local and from overseas, have set their sights on a large volume
of Mandiri's shares.
For instance, state-owned insurance company PT Jamsostek was
said to have plans to purchase some 300 million shares, but the
firm could not be contacted for confirmation.
The government initially planned to sell a 15 percent stake in
the bank, but later raised the stake offer to 20 percent citing
the strong demand from investors. The government said the shares
were 6.5 times oversubscribed.
There are some 4 billion Mandiri shares on offer with the
price set at 675 per share.
Some analysts have said Mandiri's IPO could push the rupiah to
above 8,000 against the U.S. dollar, as investors buy the
currency for the purchase of the shares.
Aside from Mandiri, foreign investors were also eying other
local assets expected to be on sale soon, including Bank Danamon
and Bank Niaga, dealers said.
The Indonesian Bank Restructuring Agency (IBRA) has said that
it would kick off the sale of another 20 percent stake in Danamon
and another 19 percent stake in Niaga.