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)