JAKARTA (Yosefardi) – As stock prices have dropped substantially year to date, some local companies mull to buy back their shares to support the stocks prices. That companies include Bank Rakyat Indonesia which views its stocks are now undervalued after losing 15% year to date.
Other banking stocks, Bank Mandiri and Bank Negara Indonesia also dropped 19.3% and 27.5% year to date.
State coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA) also plans shares buy back as its stocks have fallen 58% year to date, as it did last year and in 2011. State tin miner PT Timah Tbk (TINS) has also dropped 54% year to date.
The Financial Serives Authority (OJK) had in mid 2013 issued new rule allowing a listed company to launch a buy back of shares without seeking approval from shareholders for a maximum of 20% of total company’s paid-up shares capital.
Meanwhile the Indonesia Stock Exchange (IDX) mulls to review the rule on margin trading mechanism, mainly the requirements to include the stocks into the margin trading list. Now only 52 stocks are allowed to trade by margin mechanism.