The head of the Indonesia Stock Exchange said on March 06 he expects stock offerings to double to about $10 billion in 2008, from 44 trillion rupiah ($4.8 billion) last year, led by mining, plantations and property firms.
-- Plans to introduce futures on the composite index to allow hedging, boost liquidities
-- Plans demutualisation
Indonesian firms lined up to list in Jakarta this year include coal miners PT Adaro and PT Bayan Resources, and two state plantations firms, said Erry Firmansyah, president director of the exchange, in an interview with Reuters.
The bourse, formed through the merger of the Jakarta and Surabaya exchanges last year, will revamp its existing index future and stock options contracts, and will launch new derivatives this year including a new index future, and either stock futures or covered warrants, he said.
"Many foreign investors request it. They need them for hedging," Firmansyah said.
"It is also to increase the liquidity. That's the main target," he said, adding that liquidity had risen to 5.7 trillion rupiah a day in the first two months of 2008, from 4.2 trillion rupiah in 2007, and 1.7 trillion rupiah in 2006.
Firmansyah - whose younger brother Rinaldi Firmansyah runs Indonesia's biggest listed firm PT Telekomunikasi Indonesia - said the exchange wants to list its own shares, but requires a change in legislation before this can proceed.
The exchange, whose listed stocks and bonds have a value of 2,500 trillion rupiah, or about $275 billion, made a net profit of 200 billion rupiah last year, an increase of three or fourfold from the previous year, he said.
Indonesia was the second-best performing stock market last year after China, with a gain of 52 percent, and the benchmark index has risen seven-fold in the past six years.
With the index currently trading at around 2,660 points, just off its historic high of 2,838.48 points hit in January, and interest rates at their lowest level in nearly three years, many firms are lining up to sell shares and bonds in the red-hot capital market.
Property firm PT Bumi Serpong Damai plans to list 30 percent of its share capital, which one source said could raise as much as $300 million.
Sources also said coal miner Bayan Resources is aiming to raise 5 trillion rupiah in its IPO, while Adaro, the number two coal miner after Bumi Resources, also plans to list.
Firmansyah said he expects companies to raise between 30-43 trillion rupiah in the domestic debt market this year, compared with 30.2 trillion rupiah in 2007, as borrowers seek to lock into lower interest rates.
Indonesia's stock market has a value of 1,936 trillion rupiah, or nearly 50 percent of GDP. Firmansyah says he wants to attract more listings and increase the stock market value to 100 percent of GDP in the next two-to-five years.