17 Issuers Issue Rp 65 Trillion Rights Issue

Seventeen issuers will issue rights issues (HMETD) worth more than Rp 65 trillion. The sluggish domestic economy, anticipation of global uncertainty due to US President Donald Trump's protectionist policies, and the Fed's interest rate hikes are driving corporations to seek cheaper funding on the stock exchange. This is because the US central bank's interest rate hikes can lead to higher loan interest rates.

Besides raising capital, some issuers are seeking funding for expansion or debt repayment. Several banks are conducting rights issues to increase their capital in order to upgrade their status based on the Bank Umum Kelompok Usaha (BUKU) classification. PT Bumi Resources Tbk (BUMI) also plans to issue a rights issue with an indicative price of Rp 926 per share and a target of Rp 35 trillion, which will be used to convert its debt into equity.

For investors, before executing a rights issue, it's crucial to consider the intended use of the funds. If the funds are for expansion and capitalization, it can positively impact the issuer's revenue. However, if it's for debt repayment, it only reduces liabilities and interest payments, without directly impacting revenue. Investors should also consider the issuer's sector.