JAKARTA -- Wika Realty, subsidiary of state-owned contractor Wijaya Karya, has postponed its initial public offering because of the volatile market.
Wika Realty, which offers property development, management and construction services, was looking to raise around 2.4 trillion rupiah ($170 million) to 3.1 trillion rupiah this month through a public offering of around 12.5 billion shares at a price range of 195 to 255 rupiah each. The company had been planning to use a quarter of the amount raised to acquire land, and another 30% for corporate acquisitions.
"We have decided to postpone the process because the current condition in the [stock] market is not favorable," said Anissa Seruni, press officer for Wika Realty. Seruni declined to comment on when the IPO has been rescheduled for, saying the company was still in discussions with its parent Wijaya Karya.
Wika Realty is not the only company to postpone its IPO in recent months. Local media reports said that Wahana Duta Jaya Rucika, a pipe manufacturer, has also withdrawn its IPO plans.
Rising interest rates in the U.S. have caused some foreign investors in Indonesia to consider moving investments out of local financial markets and back to America. According to Societe Generale, stock sales by foreigner investors this year have so far totaled $2.7 billion.
The Jakarta Composite Index has fallen around 10% since the start of the year and hit an 11-month low in early May.