JSX forecasts 30 IPOs next year
JSX forecasts 30 IPOs next year
Rendi A. Witular, Jakarta
The Jakarta Stock Exchange (JSX) management estimates that 30
companies will sell their shares to the public next year by
initial public offering (IPO) and become listed on the bourse.
JSX president director Erry Firmansyah said the projection
assumed that the economic growth rate would reach between 5
percent and 6 percent next year, up from the estimated 4 percent
to 5 percent for this year.
"The economy will be relatively better next year. That is why
we expect more companies to go for an IPO to seek financing,"
Erry said on Thursday after an extraordinary shareholders
meeting.
As for this year, he was still optimistic that 20 firms would
list their shares on the bourse.
The JSX also estimates that 45 publicly listed companies will
launch a rights issue to raise cash, and issue bonus shares as
well.
Erry said that during the meeting, shareholders agreed to set
up several economic indicators as a guideline for next year's
business plan.
The inflation rate is projected at between 5 percent and 7
percent next year, Bank Indonesia's benchmark interest rate at 6
percent and the U.S. Federal Reserve key interest rate at between
1 percent and 2 percent.
The JSX has made a modest estimation that daily stock
transactions will reach an average Rp 750 billion (US$83 million)
in 2005, unchanged from this year because of a possible
fluctuation in trading.
According to indicators, the JSX expects operational revenue
of Rp 100 billion, up from the Rp 78.1 billion estimated for this
year. The bourse's pre-tax profit is projected at Rp 7.13
billion, lower than this year's target of Rp 18.9 billion upon
higher investment spending.
The JSX plans to spend Rp 48.5 billion in investment next
year, up by 223 percent from this year.
The huge investment aims to enhance the bourse's trading
infrastructure, provide new facilities to support the launch of a
new product called American Warrant and to develop remote trading
facilities.
Erry said the JSX would also provide facilities for bond
trading, like those available on the Surabaya Stock Exchange
(SSX), in anticipation of next year's capital market
demutualization policy. One of the requirements of the policy is
to combine the JSX and SSX.
At present, the SSX holds a license to facilitate bond
trading, while the JSX manages stock trading.
The government plans to demutualize the country's capital
market next year, in an effort to smooth the decision-making
process between the two bourses' managements, to revitalize the
internal divisions of the bourses and to boost communication with
investors and listed companies.
Demutualization is the transferal of the JSX's control to
individuals or institutions which no direct relations with
activity in the bourse.
The current shareholders of the JSX are securities firms.