BCA's debut fails to boost sentiment on capital market

BCA's debut fails to boost sentiment on capital market

JAKARTA (JP): Bank Central Asia's much waited stock market
debut on Wednesday failed to boost the bearish sentiment on the
local exchange as lingering uncertainty over the political and
social situations continued.

BCA shares quickly gained Rp 25 to reach Rp 1,425 right after
the market opened and increased Rp 25 further to momentarily
touch Rp 1,450.

But the bank's share price failed to reach higher ground and
instead dropped in late trading to the end the day at its initial
price of Rp 1,400.

As many as 169 million shares changed hands in the regular
trading board.

The BCA listing, the first capital market debut made by the
Indonesian Bank Restructuring Agency (IBRA), was earlier expected
to boost market sentiment, which has been under pressure for
weeks due to uncertainty over the country's political and social
climate.

IBRA, which controls over Rp 600 trillion in assets taken over
from owners of nationalized and closed down banks, initially
hoped the BCA listing would serve as the benchmark for its future
public offering plan.

"The market sentiment is currently negative. The BCA listing
happened at the wrong time," Goei Siauw Hong of PT Nomura
Indonesia said.

He hinted that the banking stocks were not going anywhere yet
as the domestic banking sector was still in shaky.

Equity analyst Martin Panggabean said, however, that BCA
shares were good for long-term investment. He acknowledged that
the market's response to the BCA shares was not as good as
expected, but he said such a response did not mean that BCA
shares were bad.

"The BCA share price will decrease only in the short term," he
said, adding that the listing was not timely.

According to Martin, the BCA listing was made at a time when
the government was going to increase interest rates and when
banking stocks were going down worldwide.

Hong said BCA shares would start to be tested by the market on
Friday, after a market holiday on Thursday.

"The first day of trading on JSX usually does not reflect how
the market will treat a company's shares. We will see on Friday
about BCA shares," he said.

Statistically on JSX, parties related to the listing company
usually intervene on the first day of trading to give the
impression that the initial public offering (IPO) is a success,
according to Hong.

"With BCA's first day of trading, we also felt there was some
support in the market which defended the bank's share price to
stop it decreasing past the Rp 1,400 initial price," he said.

An analyst at a local securities company confirmed there was
intervention to support BCA's share price in trading on
Wednesday.

"As much as Rp 140 billion in 'buying' transactions was done
by major state-owned securities companies, and some Rp 25 billion
by smaller securities companies," the analyst said.

However, IBRA's deputy chairman Jerry Eng said the government
did not have the resources to intervene in the equity market to
boost BCA shares.

"BCA's initial share price was appropriately set to reflect
current conditions," he said during a media briefing on Wednesday
morning.

BCA listed its shares on Wednesday after it offered 662.24
million shares or 22.5 percent of its total equity in its initial
public offering between May 19 and May 23. IBRA said the BCA
public offering was oversubscribed 1.2 times.

IBRA, which took over BCA in May 1998 from the Salim Group
after a massive run on the bank, owned 93 percent of the bank
before the IPO.

Listed on the same day on the JSX was securities company PT
Panin Sekuritas, which sold its initial shares at Rp 550 and
ended closing at Rp 700 on Wednesday, with 49 million shares
traded.

Hong said the shares of Panin Sekuritas only circulated within
the hands of a certain party, suspecting that the shares were
being cornered.

"They are keeping the company shares to themselves for the
time being and then could sell them on the market for a gain when
the price is made high by them," he said.

"It is so difficult, if not impossible, for investors to buy
Panin Sekuritas shares," he added.

Hong said other small companies who practiced similar actions
recently were PT Asiaplast and PT Kridaperdana Indahgraha.

"The IPOs of these small companies of course cannot be used as
a measure of market performance," Hong added. (udi)