IPO Prospect of PP Properti

In April 2014, Wijaya Karya (WIKA), one of the state-owned construction company in Indonesia, brought one of its subsidiary, Wijaya Karya Beton (WTON), to the Indonesia Stock Exchange through IPO. The proceeds were Rp1.2 trillion (about US$ 100 million), and the initial price of WTON was Rp590 per share. Before the IPO, the equity value of WTON was only Rp680 billion, which after divided by 6.7 billion shares, then the book value per share of the company was Rp102 per share. So it is quite clear that the public investor has paid the new shares of WTON at a very expensive price, ie almost 6-fold higher (590 versus 102) than the price ‘paid’ by WIKA as the majority shareholder of WTON.

PGAS: Super Bluechip at Bargain Price!

Warren Buffett once said in one of his annual letter, ‘We like to invest in companies that are already established and operated for more than 100 years. We do not want to take the risk by invest in startup companies that do not have a long track-record of performance.’ In short, Buffett prefers to invest in mature and well-established companies rather than ‘brand new’ ones. However, when this principle is applied in Indonesia, investors may find it difficult. Because, from about 500 companies that listed on the Indonesia Stock Exchange, how much of them that have been established for more than 100 years? The fact is, our beloved country (Republic of Indonesia) was proclaimed in 1945 or seventy years ago, and the Jakarta Composite Index (JCI) itself was launched in 1983.

What If The Company Controls Its Stock Price?

Some time ago I received a question from a friend (damn I have a lot of friends, thanks to this blog) which sounds like this, "Dear Sir, there are several companies on the Indonesia Stock Exchange which had a consistent growth performance, the share price is low, and the management apply the good corporate governance. But still the shares are illiquid and hard to move, one of which may Mandala Multifinance (MFIN) that you recommend.'

How to Diversify Your Portfolio Without Diversification

Diversification is an important element in investing in stocks, mainly to reduce the risk of losses, and in this blog we have discussed the theme of 'diversification' several times, for example in this article, and this. I probably need to say once more that, if you imitate the style of Warren Buffett on diversification, then you can hold about 15 to 20 different stocks in your portfolio. In the 1960s, when still managing Buffett Partnership with funds under management of approximately US$ 40 million, Warren Buffett was only holding about 20 stocks in his portfolio.