Newly listed shares at JSX mixed

Newly listed shares at JSX mixed

JAKARTA (JP): Stock analysts said yesterday that the
performances of several newly listed shares on the Jakarta Stock
Exchange (JSX) are likely to be clouded by liquidity problems,
due to the small size of their initial public offerings (IPO).

In the last two weeks, the stocks of four companies were
listed on the JSX, just when the market was in a downward trend.

In such a situation, investors need more time to see whether
the newly listed shares -- PT Lippo Karawaci, PT Citatah, PT
London Sumatra and PT Cahaya Kalbar -- are able to achieve
success in the primary market.

Lippo Karawaci offered 30.8 million shares to raise Rp 100
billion in funds, while Citatah raised Rp 104 billion by selling
44 million shares.

London Sumatra booked total IPO proceeds of Rp 180 billion by
selling 38.8 million shares and Cahaya Kalbar Rp 37 billion by
issuing 34 million shares.

Analysts said that the shares of four other companies (which
will list their shares later this month) -- PT Fiskaragung, PT
Surya Dumai, PT Kedawung Setia and PT Ramayana -- may also face a
similar problem because of their small sizes.

Several stock analysts contacted by The Jakarta Post viewed
that given the IPOs' small size, their performances in the
secondary market will depend on their lines of business and
fundamentals, together with investor strategy.

An analyst said that concerns on liquidity are likely to cloud
the performances of the planned IPOs due to their small offering
size.

"The underwriters of those offerings might have realized that
there are a lot of plans on the rights issues of big companies.
So they decided to advise on the flotation of a small size of
shares in order to avoid failures on the primary market," the
vice president of Jardine Flemming, Rizal Prasetio, told the
Post.

"Although the size is small, it doesn't necessarily mean that
those IPOs will fail to perform. If the share prices dropped in
the last few days, it doesn't mean that they have failed. It
depends on investors' strategy whether they make short-term or
long-term investments," Rizal said.

"I think the performance of the newly-listed companies is also
subject to the overall market weakness, due to the recent
political issues related to the departure of President Soeharto
to Europe for a medical check-up," Lippo Securities' managing
director Kelvin Lee told the Post.

Another analyst, who is also a president of a foreign-based
securities company, said that some IPOs are good in terms of
business lines, but uninteresting in terms of the IPO size.

Rizal denied any assumption that the IPO may have come at a
wrong time because the market was just in its downward trend.

"I think the timing of several offerings was correct, because
those offerings were reported oversubscribed. But their success
in the secondary market was another story," he said.

Cahaya Kalbar, listed yesterday, gained 6.8 percent at
yesterday's close of Rp 1,175.

Lippo Karawaci, listed on June 28, closed yesterday at Rp
3,150, or below its IPO price of Rp 3,250.

On the first listing day, Lippo Karawaci gained 7 percent with
its share prices closing at Rp 3,500.

Citatah, which was priced at Rp 2,375 on the primary market
and made a 5.2 percent gain in its first listing day on July 3,
declined to its IPO price at yesterday's close at Rp 2,375.

Meanwhile, London Sumatra, which was listed on July 5, managed
to go up to a high of Rp 5,025 at yesterday's close against its
IPO price of Rp 4,650.

Like most companies, newly listed companies usually try to
gain investors' attention by projecting higher earnings in the
first few years after the IPO.

Cahaya Kalbar is projected to book Rp 45.6 billion in sales
and Rp 12.5 billion in profits this year.

"In the first half of this year, we already booked 60 percent
of the sales target," Cahaya Kalbar's managing director, Hardy S.
said.

"We will continue to work hard to achieve the results that we
promised our shareholders. In this regard, I am pleased to report
that sales for the first half of this year were already 43
percent of the year's target," Citatah's president, Taufik
Johanes, said. (alo)