BNI's initial public offering attracts crowds of investors

JAKARTA (JP): State-owned Bank Negara Indonesia (BNI) 1946 launched its initial public offering (IPO) yesterday, attracting thousands of enthusiastic investors.

Potential investors thronged around a number of counters -- specially installed by the IPO underwriter, PT Danareksa Sekuritas, on Jl. Gerbang Pemuda, Senayan -- hours in advance of the counters' opening at 9:30 a.m.

Danareksa's operational director Musaddik Syarifuddin said that his company set up dozens of counters so that investors would not spend too much time in obtaining application forms for the shares.

The BNI shares sale was officially launched nationwide by Director General for State Enterprises Bacelius Ruru and the bank's president Widigdo Sukarmana.

BNI, the largest commercial bank in Indonesia, will sell 1.08 billion new shares or around 25 percent of its enlarged capital in the public offering. The new shares, each with a nominal value of Rp 500, will be sold for Rp 850 (approximately 35 U.S. cents).

The bank's IPO was initially scheduled for July on its 50th anniversary but was delayed for undisclosed reasons.

Musaddik said yesterday that about 50 percent of the new shares would be allocated to a number of institutional investors such as pension funds, insurance firms and mutual funds under a fixed allotment system.

"The remaining 50 percent will be sold under a pooling system, meaning that the investors might not be able to get all their orders if the demand exceeds the supply," he said.

Investors are required to place their orders during the offering period, which will last until Thursday. Because the amount of orders that must be filled, the number of application forms is limited and many rich investors have asked other people to obtain application forms for them.

Some of the investors admitted yesterday they had "recruited" a number of jockeys -- a local term for the people who take application forms for others -- to ensure that they could receive a significant number of BNI shares.

"I and nine friends of mine are all paid to get application forms," said a man standing in the line in front of one of the share counters. He said he received Rp 15,000 for his service.

The use of jockeys, who are usually paid between Rp 10,000 to Rp 15,000 for their work, is common during the sales of attractive stocks.

The listing of BNI is the fifth major IPO of a state firm since 1991.

BNI, with total assets of Rp 32.35 trillion ($13.7 billion) as of June 30, expects to raise about Rp 1 trillion from the public offering, while its deposits amount to Rp 17.90 trillion and its loans Rp 20.44 trillion.

The bank's net interest revenue during the first half of 1996 reached Rp 405.4 billion, down 0.7 percent from the same period in 1995. Total revenue during the period was up by 14.3 percent to reach Rp 663.0 billion.

Operating expenses for the first six months of the year stood at Rp 471.2 billion, up 15.9 percent compared to the corresponding period in 1995.

BNI said recently it expects its operating revenue for 1996 to reach Rp 500 billion, an increase of 40 percent from last year. (hen)