JAKARTA (TheInsiderStories)— Five Indonesian companies postponed their initial public offering (IPO) plans due to deteriorating market condition.
The five companies include PT Wika Realty, PT Wahana Vinnyl Nusantara, dan PT Artajasa Pembayaran Elektronis and PT Harvest Time.
Indonesia Stock Exchange Director Samsul Hidayat said the five companies postponed their IPO planning because they are looking for the right momentum amid the fluctuation in the capital market. Still, there are still 24 companies waiting for the Financial Service Authority approval to conduct IPO, he added.
Hidayat was previously optimistic that the weakening of Jakarta Composite Index (JCI) will not cause a delay in the IPO plans as companies already decided the plan in advance and the investor’s appetite remains strong.
He said the weakening capital market is not entirely caused by the internal factors, but mostly influenced by the external factor especially the U.S policies. He ensured Indonesia’s fundamental economy is in a strong condition.
The decision to delay IPO plans this year may extend to 2019, a year that will be filled with the general and presidential election, adding more risks to the capital market.
The Jakarta Composite Index (JCI) had been in decline since last week. Yesterday, JCI closed at 5,733.85, down by 49.46 per cent or 0.86 per cent extending last week drop of 0.56 per cent of 32,61 points at level 5,783.31. JCI finally closed up by 0.59 per cent or 33.77 points at 5,751.12 level on May 22, 2018.
The weakened due to the negative perception of Indonesia’s economic condition and national security concern. In the economic condition, rupiah continues to weaken against U.S Dollar.
The Rupiah is the second worst performing currency in Asia in the last three months and broke through Rp14,200 per U.S dollar, a level not seen since December 2015.
The economy also suffered from a series of terrorist attacks that raise doubts on Indonesia’s national security. In the days leading up to Ramadan 2018, Indonesia suffered a spate of terrorist attacks that left 48 people dead, including members of two families who carried out suicide bombings in Surabaya.
Indonesia’s changing threat landscape was evident in the repertoire of a series of events, which included a 40-hour prison riot in Depok, near Jakarta, starting on May 8; the stabbing and killing of a police officer at the Mobile Intelligence Unit on May 10; a triple church attack on May 13, followed by another bombing that night; an attack on a police headquarters in Surabaya on May 14; and a terrorist raid targeting the police headquarters in Pekanbaru, the capital of Riau province.