Despite Market Uncertainty Many IPOs in Indonesia So Far in 2018

So far 2018 has been a great year in terms of initial public offerings (IPOs) on the Indonesia Stock Exchange. A total of 20 companies became publicly-listed companies in Indonesia in the first five months of 2018, thus there are now a total of 584 listed companies on the Indonesia Stock Exchange. Actually it is still a relatively low number compared to its regional peers and therefore local authorities continue to encourage more IPOs in an effort to deepen the country's financial markets.

What makes it even more remarkable to have 20 companies being added to the Indonesia Stock Exchange in the January-May 2018 period is that it occurred at a time when uncertainty in global financial markets is very high. Yes, investors have indeed more-or-less become used to a higher degree of persistent market uncertainty over the past couple of years (specifically since May 2013 when the Federal Reserve started hinting at an end to its quantitative easing program). However, uncertainty has heightened further after Donald Trump became US president as he vowed to uproot US trade with the world (and specifically China) and caused some geopolitical turmoil (on the Korean Peninsula and in Jerusalem).

Investing in Indonesian IPOs is a lucrative affair. Whereas the benchmark Jakarta Composite Index has fallen 5.70 percent so far in 2018, the 20 IPOs have risen by an average of 15.23 percent over the same period. Particularly shares of Dafam Property Indonesia (+82 percent), Sriwahana Adityakarta (+70 percent), and Steadfast Marine (+69 percent) surged robustly although it is fair to inform that the last two made their trading debuts on the final trading day before the long Idul Fitri holiday (11-19 June) and therefore it is expected that investors will engage in some profit taking in the next couple of trading days after the holiday has been over.

IPOs on the Indonesia Stock Exchange in January-May 2018 Period:

Company   IPO Value
(in IDR billion)
      Return
(Year-to-Date)
LCK Global Kedaton        41.6        +5%
Borneo Olah Sarana Sukses       160.0       +12%
Jaya Trishindo        27.5        +2%
Sky Energy Indonesia        81.3       +11%
Indah Prakasa Sentosa        41.4       +20%
Tridomain Performance Materials       411.0        +2%
Gihon Telekomunikasi Indonesia       178.9        +4%
Dafam Property Indonesia        46.0       +82%
Charnic Capital        40.0        +1%
Bank Tabungan Pensiunan Nasional Syariah       751.1        +3%
Bank BRISyariah      1,340.0       +20%
Surya Pertiwi       812.0        +2%
Royal Prima       600.0        +8%
Medikaloka Hermina      1,300.0        +7%
Sarimelati Kencana       664.8        -3%
Guna Timur Raya        34.5       -13%
Asuransi Tugu Pratama Indonesia       679.1        +2%
Steadfast Marine        40.3       +69%
Sriwahana Adityakarta       106.3       +70%
MNC Studios International       780.0        +5%

Source: Indonesia Stock Exchange

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