BRI to be added to MSCI Standard Indices

BRI to be added to MSCI Standard Indices

Dow Jones, Jakarta

Bank Rakyat Indonesia, the country's fourth largest bank by
assets, will be added to the Morgan Stanley Capital International
(MSCI) Standard indexes starting Nov. 21.

The move was made following the bank's successful initial
public offering (IPO) earlier this month, MSCI said in a
statement issued on Tuesday.

MSCI said the market capitalization of BRI stock available for
investors was above a US$200 million threshold needed for
inclusion in the indexes.

The inclusion of BRI to the MSCI list will boost sentiment
toward the stock, as overseas funds often use MSCI indexes as a
benchmark to make investment decisions.

Indeed, shares in BRI rose by Rp 25, or 2.6 percent at Rp
1,000 per share on the news despite the overall weak stock market
sentiment.

BRI also shrugged off the weak market trend on Monday when it
made its first stock market debut as the share price closed 11
percent higher at Rp 975. Investors had been heartened by the
bank's strong fundamentals and earnings outlook.

The bank sold 4.76 billion shares, or 40.5 percent of its
total shares through an IPO earlier this month. This was the
country's largest IPO since the late 1990s financial crisis.

There was strong demand for the IPO as the shares were more
than 13 times oversubscribed. This has allowed the government to
price the IPO at the top range of the price target.

Foreign investors accounted for two-thirds of the IPO shares
on growing interest in Indonesia's booming asset markets. Lower
interest rates and a stable political environment have pushed up
the stock market by almost 45 percent since the start of the
year.

Bank Rakyat is now among the top 15 capitalized stocks on the
Jakarta Stock Exchange, and the fourth largest in the banking
sector after Bank Mandiri, Bank Negara Indonesia and Bank Central
Asia.

Bank Rakyat lends mainly to farmers and small businesses, and
has only a tiny portion of loans with corporations, analysts
said.