December 11, 2012 / 5:41 AM / in 5 years

STOCKS NEWS INDONESIA-Large banks to be in favour on better financial stability -CLSA

CLSA Asia Pacific Markets has said large banks will be favoured as regulators promote consolidation and restrict expansion of weaker capitalised banks, as government’s focus will be on maintaining financial system stability.

“Systemically important financial institutions (SIFI) are becoming an increasing focus globally. In Indonesia, larger banks with higher capital bases will be given preferential treatment on expansion with smaller banks being restricted to encourage consolidation,” CLSA analyst Jayden Vantarakis said in a note on Tuesday.

Indonesia will transition to a 4-body financial system oversight model, with the introduction of the Financial Services Authority (OJK) to complement roles already played by the Ministry of Finance, Deposit Insurance Scheme and Bank Indonesia.

OJK will immediately take over capital market micro-prudential and conduct of business oversight from Jan. 1 next year and Bank Indonesia will then hand over its micro-prudential and conduct of business oversight to the OJK from Jan. 1, 2014 but retain its monetary policy setting and macroprudential function, the note said.

The research house’s top picks are large banks such as Bank Central Asia and Bank Mandiri, which are focused on leading retail franchises and have clear lending strategies.

Shares of Bank Central Asia were up 1.64 percent at 9,300 rupiah and Bank Mandiri were up 1.26 percent at 8,050 rupiah. The Jakarta finance index was up 0.75 percent, while the broader index rose 0.28 percent.

1210 (0510 GMT) (Reporting by Andjarsari Paramaditha in Jakarta; Editing by Sunil Nair)

**************************************************************** 10:54 STOCKS NEWS INDONESIA-Waskita Karya eyes $122 mln from IPO

Indonesia’s state-owned construction frim PT Waskita Karya plans to raise up to 1.17 trillion rupiah ($121.50 million) in an initial public offering that opens on Dec. 19, the company said on Tuesday.

The property firm has set an offer price of 380 rupiah per share for 3.1 billion new shares or 32 percent of its enlarged capital.

Bahana Securities, Danareksa Sekuritas and Mandiri Sekuritas have been named underwriters for the IPO.

Waskita Karya will be the only state-owned company to be listed on the Indonesian stock exchange this year as Southeast Asia’s largest economy shows a reduced appetite for IPOs in the face of a global economic slowdown.

The broader index was up 0.43 percent.

($1 = 9,630 rupiah)

1042 (0342 GMT) (Reporting by Fathiya Dahrul; Editing by Sunil Nair)

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