Dual Listing Strengthens Global Funding Access for Indonesian Mining Issuers

The move by PT Merdeka Gold Resources Tbk (EMAS) to list its shares on The Stock Exchange of Hong Kong (HKEX) via a Hong Kong Depositary Receipts (HDR) scheme is being viewed as a positive signal for the Indonesian mining industry. The corporate action is seen as capable of expanding global funding access while increasing international investor confidence in national issuers. The share listing on HKEX is considered an important strategy for EMAS to strengthen its long-term capital structure, particularly in supporting the development of the Pani Gold Mine Project.

Senior Analyst at Mirae Asset Sekuritas, Nafan Aji Gusta, stated that the decision to pursue a dual listing was the right move, supported by market momentum and the company’s expansion needs. According to him, the current global macroeconomic conditions support this step. The positive trend in gold prices as a safe-haven asset amidst geopolitical and economic uncertainty provides an opportunity for EMAS to achieve a more optimal valuation in the international market. Furthermore, the share listing on HKEX opens access to broader funding sources given the relatively limited domestic market liquidity. Nafan assessed that Hong Kong, as one of the world’s financial centres, has high standards of corporate governance and transparency, thereby enhancing the company’s credibility in the eyes of global investors.

“EMAS’s success in penetrating the HKEX Main Board with the stock code 6228 demonstrates that the quality of its assets (particularly the Pani Project), management, and business prospects have met the qualification standards of global institutional investors,” Nafan said. He added that this success also provides positive sentiment towards Indonesia’s investment image, as it shows that national companies are capable of managing world-class mining projects with international standards. According to Nafan, the presence of EMAS HDRs in Hong Kong also has the potential to increase foreign investor attention towards the Indonesian capital market. Besides expanding the investor base, this step reflects the ability of Indonesia’s financial market regulations to adapt to developments in the global financial ecosystem.

With a larger investment ecosystem in Hong Kong, EMAS is considered to have the opportunity to reach various global institutional investors, including sovereign wealth funds, hedge funds, and investors focused on the commodity and mining sectors. Higher liquidity is also believed to support a more optimal price discovery process, both on the HKEX and the Indonesia Stock Exchange (IDX). Besides impacting the company’s valuation, the certainty of funding is also expected to facilitate the development of mining projects. “With more secure funding from the global market, the risk of delays in the commercialisation of the Pani Gold Mine can be minimised,” Nafan stated.

A similar view was expressed by Associate Director of Pilarmas Investindo Sekuritas, Maximilianus Nico Demus. According to him, the dual listing is an indicator that EMAS has business fundamentals and a valuation trusted by the international market. “This means market players and investors trust companies from Indonesia, amidst the current situation and conditions,” Nico said. He assessed that the share listing on HKEX simultaneously shows that EMAS has corporate governance and a level of transparency capable of meeting global standards. According to Nico, EMAS’s presence on the Hong Kong stock exchange also strengthens the company’s position internationally. “This is a form of international recognition, not only for EMAS but also for the ability of Indonesian companies to meet global standards,” Nico said.

Previously, EMAS officially commenced trading on the HKEX Main Board with the stock code 6228. In this corporate action, the company’s HDRs were offered at a price of HK$26.60 per HDR and traded in board lots of 100 HDRs. This step is expected to broaden global investor access to the Pani Gold Mine Project while strengthening the company’s funding base.