Capital Markets
From The Report: Indonesia 2015
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The number of listed companies on the Indonesian Stock Exchange (IDX) increased by 50% in the decade to 2014, and market capitalisation was up five-fold in that period. In terms of the exchange’s performance, the index has risen far more than those of its regional peers and international benchmarks. Still, the capital markets are in need further development. For the nation to grow as it hopes and plans, the IMF and others have said that it must endeavour to create markets that are larger and more sophisticated. If the capital markets continue to improve and evolve, and if the authorities are able to get more firms listed and increase the number of shareholders, volatility and risk can be greatly reduced and the markets can play a more significant role in the transformation of the economy.

This chapter contains interviews with Muliaman D Hadad, Chairman, Financial Services Authority; and Michael Steven, President-Director, Kresna Securities.

Articles from this Chapter

Overview

Broadening the exchange in Indonesia
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Developing well in recent years, the number of listed companies on the Indonesian Stock Exchange (IDX) increased by 50% in the decade to 2014, while market capitalisation was up five-fold in that period. In terms of performance, the composite index has risen far more than those of its regional peers and the international benchmarks. It is up 400% over the past decade, while Malaysia’s KLSE Index has only doubled, Singapore’s STI has risen just 50% and the S&P 500 around 75%. Significant reforms…

Overview

Broadening the exchange in Indonesia
OBG
plus

Developing well in recent years, the number of listed companies on the Indonesian Stock Exchange (IDX) increased by 50% in the decade to 2014, while market capitalisation was up five-fold in that period. In terms of performance, the composite index has risen far more than those of its regional peers and the international benchmarks. It is up 400% over the past decade, while Malaysia’s KLSE Index has only doubled, Singapore’s STI has risen just 50% and the S&P 500 around 75%. Significant reforms…

Interview

Muliaman D Hadad, Chairman, Financial Services Authority (OJK): Interview
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Interview:Muliaman D Hadad Of the markets OJK is responsible for, which have the greatest opportunities for development? MULIAMAN D HADAD: With a growing population, a rising middle class and increased financial literacy, the demand for more advanced financial services keeps growing, particularly in the insurance sector. Therefore, an increase in the variety and sophistication of insurance products to protect properties such as vehicles and houses is needed to meet the growing demand. Additionally,…

Interview

Michael Steven, President-Director, Kresna Securities: Interview
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Interview:Michael Steven How would you describe the regulatory environment in Indonesia’s capital markets sector, and what needs to improve? MICHAEL STEVEN: The capital markets sector in Indonesia is growing, and therefore some aspects of the regulatory environment need to improve. We need to speed up administrative procedures, and we need regulatory certainty in order to boost investor confidence in our market. The Financial Services Authority (OJK) is becoming a big institution, and market…

Analysis

Developing the Islamic capital markets offering in Indonesia
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Although Indonesia has the world’s largest Muslim population, it trails many other markets in terms of uptake, awareness and product innovation in Islamic capital markets. As of the end of May 2015, only 3.3% of corporate bonds and 11.8% of government bonds by value were sharia-compliant. By contrast, in Malaysia half of all debt issued meets Islamic standards. According to the Financial Services Authority (OJK), Indonesia’s Islamic capital markets have developed for more than a decade, but…

Analysis

Share analysis: Mitra Keluarga Karyasehat – health care
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The Company Mitra Keluarga Karyasehat (MIKA) is the second-largest private multi-speciality hospital group in Indonesia in terms of number of hospital beds (in 2013), according to Frost & Sullivan. The company network consists of 11 hospitals (Bekasi Barat, Bekasi Timur, Cibubur, Cikarang, Depok, Kelapa Gading, Kemayoran, Kenjeran, Surabaya, Tegal and Waru) with total bed capacity of 1953 (as of 2014). MIKA’s operational focus is for each hospital to provide a comprehensive range of general hospital services for the local community. Each facility provides services to cater to both inpatients and outpatients, including emergency rooms,…

Analysis

Share analysis: Mitra Adiperkasa – retail
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The Company Mitra Adiperkasa (MAPI) claims itself as the number-one lifestyle retailer in Indonesia. As of 2014, MAPI had 1931 retail outlets located in 64 Indonesian cities, with a portfolio of over 150 international brands and 111 retail concepts. The company divides its business into four major segments: retail (clothes, sports and toys), department stores, cafés and restaurants, and others. The retail segment accounted for 63.4% of total revenue in 2014, while the department stores and cafés and restaurants segments contributed 22% and 13.1%, respectively. Profitability wise, the retail segment offered the highest operating margin in 2014…

Analysis

Share analysis: Telekomunikasi Indonesia – telecommunications
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The Company Telekomunikasi Indonesia (TLKM) is a state-owned company which provides telecommunications, information, media and edutainment, as well as information and technology services. The company was founded in 1856, and went public for the first time in November 1995, both on the Indonesia Stock Exchange as well as the New York Stock Exchange (as American depository shares through Bank of New York Mellon). TLKM, through its subsidiary Telkomsel, is the largest mobile operator with 141.46m subscribers, having conquered 60% of the smartphone market in Indonesia. Data and internet contributed 27% to the group’s FY2014 revenue. TLKM had a…

Analysis

Share analysis: Bumi Serpong Damai – real estate
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The Company Established in 1984, Bumi Serpong Damai (BSDE) is a property developer well known for its success in developing BSD City in Serpong, Banten, from a mere plot of land into a highly populated satellite city with over 160,000 people. The city is accessible through two toll roads, namely, the Jakarta-Serpong and Bintaro-Serpong routes, taking approximately half an hour (assuming light traffic). In 2014, BSDE launched at least 15 residential clusters, two commercial areas and two apartment towers. Aside from its main core in BSD City, Serpong, the company has also developed several residential projects, such as Grand Wisata in Bekas, West…

Analysis

Share analysis: Kalbe Farma – pharmaceuticals
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The Company Kalbe Farma (KLBF) was established in 1966 in a humble garage house in North Jakarta by six siblings: Khouw Lip Tjoen, Khouw Lip Hiang, Khouw Lip Swan, Boenjamin Setiawan, Maria Karmila and F Bing Aryanto. For over 40 years, the company has been aggressively expanding its business, both organically and through strategic acquisitions, to become a provider of integrated health care solutions. It acquired Dankos Laboratories in 1977, Bintang Toedjoe and Hexpharm Jaya in 1985, Woods’ brand and Saka Farma Laboratories in 1997, as well as Sanghiang Perkasa in 1993.KLBF has also been active in research and development (R&D) for leading-edge…

Analysis

Share analysis: Sido Muncul – pharmaceuticals
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The Company Sido Muncul (SIDO) is one of Indonesia’s top manufacturers of herbal and consumer health products. Its popular products include the revolutionary Tolak Angin and Kuku Bima Ener-G, both market leaders in their respective segments, with market shares of 60% and 75.1% as of 2012, according to Capricorn Indonesia Consult. Despite its sturdy balance sheet, with a 0.1x debt-earnings ratio as of July 2013, the company decided to list its shares on the Indonesia Stock Exchange in December 2013. This initiative was considered necessary to expedite the process of becoming the top consumer health company in Indonesia. As of 2014, herbal medicine…