Creating investor interest

SINCE TAKING OVER THE exchange, ERRY has been tireless in promoting the stock market to retail investors across the country. He has introduced innovative concepts to educate retail investors in the benefits of investing in the stock market.

In his view, increasing the number of listed companies and raising the number of retail equity investors go hand in hand as one will support the other. He is thus working with universities a and stock brokers to help spread the message, given that there are only about one million stock market investors in a country with a population of 230 million people.

One idea he has introduced that has worked well is opening offices in areas stock brokers are not servicing. These offices are operated by the exchange but brokers are allowed to use them free of charge. To date, the exchange has opened 10 such outlets with a target of opening two new outlets a year.

Avi Dwipayama of Trimegah Securities supports these initiatives but he adds that the government should push state pension funds such as jamsostek to invest more of their funds in the stock market.

“As the current price of shares in the stock market has become very cheap, it is high time for the government to push local investors to buy shares more aggressively,” he says. “The capacity of retail investors is limited. There lies the responsibility of the government and the Indonesia Stock Exchange to educate the public about the capital market” (more…)

Heavyweight player emerged

The Bakrie Group, for example, will be more focused on digesting the assets it has acquired over the past few years and, as such, will not be on the prowl for new acquisitions. Other large groups that have leveraged heavily will also be consolidating rather than expanding over the next few years.

“The likes of the Bakries, Chairul Tanjung, Teddy Rachmat and Anthony Salim will still be around but they will be more cautious and this will allow new players to enter the gig:’ notes Gita. ‘And it will happen faster than we think.”

His own Ancora International is well poised to tap these emerging opportunities. He hopes to expand into the natural resource sector by acquiring distressed assets when they come to the table. Ancora Capital, Indonesia’s first Shariah compliant private equity fund, recently bought a controlling ownership in major oil drilling company Apexindo Pratama Duta for $185 million and a 5% stake in coal producer Bumi Resources for $75 million.

Ancora Indonesia Resources, which currently has a market capitalization of $25 million, has ambitions to become a major player in the mining industry with an expansion into mining development and services. Presently the company has an ammonia nitrate business to manufacture explosives for the mining sector but intends to acquire mining, oil and gas assets in the future. (more…)