The Allure of Initial Public Offerings (IPOs) on the Jakarta Stock Exchange

During the first semester of 2017, 16 new issuers listed their shares on the Indonesia Stock Exchange. Of these, 15 experienced price increases, with only one experiencing a decline. Nine of the 15 issuers that saw price increases rose by more than 100 percent. Two even surged by more than one thousand percent.

PT Sanurhasta Mitra Tbk's share price closed at Rp 1,485 per share on June 22, 2017, representing a 1,314 percent surge. This means that investors who bought shares with the trading code MINA during the initial public offering (IPO) at Rp 105 per share have realized a substantial profit, more than 13 times their initial investment.

Indonesia's still-solid economic fundamentals, such as economic growth of around 5 percent, controlled inflation of around 3 percent, and the rupiah exchange rate remaining at around Rp 13,000 per US dollar, have supported investor confidence in the domestic market. Furthermore, Standard & Poor's upgrade of Indonesia's sovereign debt rating to BBB-, bringing it back into investment-grade territory, has attracted fund managers, both domestic and foreign, to invest in the Jakarta Stock Exchange. As a result, the Jakarta Composite Index (JCI) closed at 5,829.7 on Thursday, June 22, its highest level ever.