Jakarta. Global market volatility and rising geopolitical uncertainty have contributed to a decline in the number of Indonesian companies pursuing initial public offerings this year, the Financial Services Authority (OJK) said.

OJK Capital Markets, Derivatives Finance, and Carbon Exchange Supervisory Chief Executive Hasan Fawzi said companies were also taking longer to proceed with IPOs as market conditions affected the timing of their offerings.

“Several factors have influenced the decline in prospective IPO companies, including global market dynamics and rising geopolitical uncertainty, which affect companies’ timing for conducting public offerings,” Hasan said Thursday.

As of Sept. 6, only seven companies were in the IPO registration pipeline, with a combined maximum estimated fundraising target of Rp4.02 trillion ($225 million).

The figure comes as OJK targets Rp250 trillion in total capital-market fundraising this year. As of Sept. 6, Rp148.3 trillion had been raised.

Hasan said some IPO plans had yet to receive OJK approval because companies needed to improve the quality of their disclosures.

OJK's focus is not only on the number of companies listing on the Indonesia Stock Exchange (IDX), but also on total fundraising in the capital market, he said.

“[OJK] continues to prioritize the quality of information disclosure and the readiness of prospective issuers,” Hasan said.

One company that has postponed its IPO is health product manufacturer Swayasa Prakarsa. Hasan said OJK had yet to issue an effective statement after the company changed its underwriting arrangement from a full-commitment basis to best effort.

The change requires additional disclosures in the prospectus, particularly on alternative sources of funding if the IPO proceeds fall short of the target, he said.

IDX President Director Jeffrey Hendrik said volatile market conditions were also affecting companies’ decisions to proceed with IPOs. In addition to share prices, companies were considering market absorption when determining the timing of their offerings.

The exchange continues to monitor new IPO plans and hold discussions with prospective listed companies, Jeffrey said Wednesday. Several companies were still in talks with the IDX this week, he said.

Add as a preferred source on Google +