RI bourse offers competitive costs

RI bourse offers competitive costs

JAKARTA (JP): The Indonesian capital market offers competitive
costs to companies listing their shares, said the chairman of the
association of Indonesian securities companies, Yannes Naibaho.

Yannes told journalists here yesterday that based on available
data his office has concluded that recent press reports about the
high cost of going public through the Indonesian capital market
do not make sense.

On Dec. 30, Kompas published an article written by Andreas
Lauw, the research manager of the Indonesian Business Data
Center, pointing out upward trends in costs on the Indonesian
capital market.

Lauw said that costs for the share issuance of 192 companies
through the Jakarta Stock Exchange (JSX) from 1979 to 1995 ranged
from 2.29 percent to 32.8 percent of the funds raised from going
public.

The costs for share issuance increased from 4.69 percent of
the values of issues in 1989 to an average of 6 percent in 1991.
The costs continued increasing to 6.7 percent in 1992 when the
management of the JSX was handed over from the Capital Market
Supervisory Agency (Bapepam) to a private company. The costs hit
their highest level of 7.4 percent on average in 1993, he said.

The costs decreased to 5.8 percent in 1994, following a number
of simplification measures issued by Bapepam, but rose back to
6.7 percent last year.

Lauw disclosed that PT Indocitra even had to spend Rp 3.1
billion, which was equivalent to 32.8 percent of the Rp 9.3
billion it raised from its share issuance. The cost, in terms of
proportional percentage, was far higher than that paid by PT Tri
Polyta for its share listing on NASDAQ, in the United States,
last year.

On the contrary, Yannes argued that PT Tri Polyta paid a
higher cost for its listing abroad than companies issuing a
similar size of shares on the JSX.

He cited that the cost spent by Tri Polyta accounted for 7.7
percent of the total issue's value of Rp 338.2 billion, whose
underwriting was based on a best-effort arrangement.

Meanwhile, the average cost of share issuance with a similar
size by PT PSP (to generate Rp 310 billion in public funds),
Citra Marga (Rp 317 billion), Ciputra Development (Rp 260
billion) and Jababeka (Rp 232 billion) was only 5.4 percent of
the total issue.

"The average cost of the share issuance of 192 listed
companies in the period of 1979 to 1995 was only 5.9 percent,"
Yannes said.

He acknowledged that the issuance costs would be higher for
small companies.

"However, our survey showed that the costs for small-size
issuance was not as high as in the case for Indocitra, as
described by PDBI. The average cost for three small-size issues
-- PT Super Indah (Rp 10.4 billion), PT Ugahari (Rp 14.9 billion)
and PT Intinusa Selareksa (Rp 15 billion) -- was 9.3 percent of
the total value of the issues," he said.

Yannes also acknowledged that the underwriting fee of 4
percent -- based on a full-commitment arrangement -- of the
issue's value is too high.

Yannes said that even with a full commitment underwriting
system, the costs for the share issuance of PSP, Ciputra, Citra
Marga and Jababeka were still lower than the cost paid by Tri
Polyta. (08)