Healthcare Law Passed, Positive Sentiment for Healthcare Stocks?

The House of Representatives (DPR) passed a revision of Law Number 36 of 2009 concerning Health on Tuesday (11/7/2023). This law removes 11 articles, now containing 458 articles.

According to *Katadata*, Deputy Chairperson of Commission IX of the DPR RI, Emanuel Melkiades Laka Lana, claims that the removal of several articles was done to prevent overlapping and conflicting health regulations.

Melkiades noted that the new Health Law consists of 20 chapters and 458 articles. The number of articles remains unchanged from the first-level discussion in Commission IX of the DPR.

The ratification of the Health Law has become a public discussion. The law is considered to have been passed too quickly, having been drafted in only six months and deemed non-transparent. This was stated by the Chairperson of the Indonesian Doctors Association (IDI), Muhammad Adib Khumaidi.

"Therefore, we from IDI, along with four professional organizations, will prepare legal action," said Adib in an official IDI video on Wednesday (12/7/2023).

Besides IDI, the four health professional organizations that will sue over the law are the Indonesian Pharmacists Association, the Indonesian Midwives Association, the Indonesian National Nurses Association, and the Indonesian Dentists Association.

Meanwhile, Minister of Health Budi Gunadi Sadikin stated that his office had involved public participation in drafting the Health Bill. Public hearings in the drafting of the bill were held twice.

He also invited those who disagree with points in the Health Bill to voice their objections.

"I think in a democracy, it's natural to have differing opinions," said Budi at the Vice President's Palace, Jakarta, on Tuesday (20/6/2023).

So, did the ratification of the law have a positive sentiment on health sector stocks?

(See also: IHSG Closed Higher, Health Sector Stocks Soar (Tuesday, July 11, 2023))

Databoks compiled data on three health sector issuers through Yahoo Finance.

First, PT Prodia Widyahusada Tbk (PRDA), which has seen an increase over the past three days, coinciding with the ratification of the Health Law.

Prodia is a long-standing company established in Solo in 1973. The company focuses on developing clinical laboratories. Through its official website, Prodia states that its laboratory has accreditation from the College of American Pathologists (CAP).

At the close of trading on Monday, July 10, 2023, its share price was Rp5,525. However, a day later, on Tuesday, July 11, 2023, it soared to Rp5,800 per share. This value remained until Wednesday, July 12, 2023.

The movement of PRDA shares continues to rise consistently. The latest update, Thursday, July 13, 2023, at 13:00 WIB, its value reached Rp5,975 per share. PRDA's market capitalization also exceeded Rp5.602 trillion.

Second, there is PT Mitra Keluarga Karyasehat Tbk with the stock code MIKA. This company built its first hospital in 1989, Mitra Keluarga Jatinegara, as explained on its official website.

At the close of trading on Monday, July 10, 2023, its share price was only Rp2,600. On the following day, it rose to Rp2,650 per share.

MIKA continued to climb, reaching Rp2,750 per share at the close of trading on Wednesday, July 12, 2023. In the latest development, Thursday, July 13, 2023, at 13:17 WIB, its share price reached Rp2,870.

MIKA's market capitalization far surpasses PRDA, reaching Rp39.915 trillion on Thursday, July 13, 2023.

Third, PT Medikaloka Hermina Tbk or HEAL. From the history described on its official website, this maternity hospital was established in 1985 in Jatinegara under the name Rumah Bersalin Djatinegara. Currently, Hermina has 45 RSU category hospitals in 31 cities in Indonesia.

At the close of trading on Monday, July 10, 2023, its share price was Rp1,395. Shifting to Tuesday, July 11, 2023, its value increased to Rp1,450 per share.

However, HEAL experienced a slight decline in trading on Wednesday, July 12, 2023, to Rp1,445 per share. But in the latest update, Thursday, July 13, 2023, at 13:26 WIB, its value soared again to Rp1,525 per share.

HEAL's market capitalization reached Rp22.1 trillion.

(See also: DPR Ratifies Health Bill, Does the Public Agree?)