Feb 24, 2011

Watch Garuda IPO lead underwriters!

Indonesia Stock Exchange (IDX) is closely monitoring net adjusted working capital (MKBD) of three IPO's lead underwriters of PT Garuda Indonesia (Persero) Tbk (GIAA) as Indonesian flag carrier steeply plunged from the IPO level at Rp750.
Referring to IDX daily data, working capital of PT Bahana Securities yesterday steeply shrank 73.14% to Rp54.15 billion when GIAA reached Rp530 from Rp201.64 billion before the first day listing. 
PT Danareksa Sekuritas also suffered a 52.84% drop in working capital to Rp223.34 billion yesterday from Rp473.57 billion before GIAA was trading its debut at Rp750.
PT Mandiri Sekuritas, wholly owned subsidiary of PT Bank Mandiri Tbk (BMRI) which also previous share holder of Garuda, experienced a 28.18% fall in working capital to Rp119.26 billion from Rp166.07 billion.
Based on the regulation of Capital Market and Financial Institution Supervisory Agency (Bapepam-LK), a securities house must maintain a minimum safety level of net adjusted working capital at Rp25 billion.
"If a brokerage's working capital below Rp25 billion, IDX won't allow the brokerage to facilitate trading," said IDX Director Wan Wei Yong as quoted by Bisnis Indonesia today.
According to him, if a brokerage intends to boost its working capital, it must increase number of current assets such as portfolios or cash and cash equivalents or reduce total liabilities.
Bahana Securities President Director Eko Yuliantoro declined to comment, while President Director Marciano Herman at Danareksa admitted that one of the factors for the decrease is Garuda's stocks. Mandiri Sekuritas Managing Director Kartika Wirjoatmojo didn't reply calling on his cellular last night.
The problem is oil price keeps hiking to surpassing US$100 per barrel, dragging down stock market. Under current situation, will Garuda stocks revive? The higher Garuda stocks the safer lead underwriters.

Disclosure: No position at the stock mentioned above.

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