Rights Issue Success Highlights Indonesia's Banking Sector

Indonesia's PT Bank Danamon Indonesia confirmed on April 21 that its IDR3.98trn (US$362mn) rights issue had been 99.9% subscribed, in a move that represents the most successful Asian rights issue this year by take-up and which further underlines the relatively strong outlook for Indonesia's banking sector through 2009. The move comes in the wake of a string of rights issues by Asian borrowers, with DBS Group and Singaporean mall developer CapitaLand both making high profile offerings in recent months. Indeed, it further underlines CFW's prediction that many Asian corporates would increasingly be forced look to highly discounted rights issues in order to raise capital (see 'Further Discounts Ahead In Asia', CFW¸ February 16 2009). Unusually, however, Bank Danamon's share price actually rose during the offer period, increasing by 30% from IDR2,250 prior to the rights issues announcement to IDR2,925, and widening the discount from 46.7% to 59%.

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