JAKARTA/SINGAPORE, June 21 (Reuters): The spark that Matahari Department
Store's $1.3 billion deal was meant to provide Indonesia's IPO market
has turned into a dud.
Investors have bailed on Indonesian stock offerings, spooked by a wave of global market volatility and pricey valuations. The retreat from Jakarta by local and foreign funds is threatening other IPOs in the pipeline and hindering the ability of Indonesian tycoons to unlock money from their businesses.
Bankers and issuers were anticipating a record $4.1 billion worth of initial public offerings in 2013, including $2.5 billion in the first half of the year. The Matahari deal in March - in which private equity firm CVC Capital sold down its stake in Indonesia's biggest stock sale since 2011 - was seen as a stage setter.
The outlook for the market still appears positive given Indonesia's economic prospects. But in the last few months, Jakarta IPOs are being cut in half or abandoned altogether.
"People were thinking that they were sitting on a pile of gold," said an investment banker who covers Southeast Asia, referring to Indonesian equity deals. "The recent correction is making everybody's expectations much more realistic."
Indonesia's leading shariah lender, PT Bank Muamalat, said on Friday that it had postponed its up-to $177 million IPO because of recent stock market declines.
Investors have bailed on Indonesian stock offerings, spooked by a wave of global market volatility and pricey valuations. The retreat from Jakarta by local and foreign funds is threatening other IPOs in the pipeline and hindering the ability of Indonesian tycoons to unlock money from their businesses.
Bankers and issuers were anticipating a record $4.1 billion worth of initial public offerings in 2013, including $2.5 billion in the first half of the year. The Matahari deal in March - in which private equity firm CVC Capital sold down its stake in Indonesia's biggest stock sale since 2011 - was seen as a stage setter.
The outlook for the market still appears positive given Indonesia's economic prospects. But in the last few months, Jakarta IPOs are being cut in half or abandoned altogether.
"People were thinking that they were sitting on a pile of gold," said an investment banker who covers Southeast Asia, referring to Indonesian equity deals. "The recent correction is making everybody's expectations much more realistic."
Indonesia's leading shariah lender, PT Bank Muamalat, said on Friday that it had postponed its up-to $177 million IPO because of recent stock market declines.
Blogger Comment
Facebook Comment