Indonesia's Barito Renewables tanks on FTSE Russell exclusion
Adds details, background, context and analyst comment
Sept 20 (Reuters) -Indonesia's Barito Renewables Energy BREN.JK plunged by its daily limit of 20% on Friday after global index provider FTSE Russell said it would remove the geothermal energy giant from its indexes because of "high shareholder concentration".
Barito Renewables, Indonesia's biggest company by market value, will be added to the FTSE Global All Cap Index series and associated gauges on Sept. 23, as planned, but will be removed at the start of the next session.
Four shareholders control 97% of Barito Renewables' total shares, FTSE Russell said.
The company is majority-owned by Barito Pacific BRPT.JK, from which it was spun off late last year. Billionaire Prajogo Pangestu owns around 71% of Barito Pacific.
Singapore-based Green Era Energy, a renewable energy investment arm of the Pangestu family, owns 23.6% of Barito Renewables. Jupiter Tiger Holdings and Prime Hill Fund own about 4.4% each.
"This decision from FTSE has triggered panic selling among investors, particularly in Prajogo Pangestu's companies, which led to a decline in the Indonesia Stock Exchange Composite Index," Christine Natasya, equity research analyst at Bahana Sekuritas, said.
Barito Renewables fell 20% to its lowest since mid-August on Friday, marking its worst day since early January.
Thermal coal miner Petrindo Jaya Kreasi CUAN.JK, in which Pangestu owns an 85% stake, lost nearly 20% before recovering some of the losses.
Chandra Asri Pacific TPIA.JK, another Pangestu-owned company, fell around 9%.
That weighed on the Indonesian benchmark .JKSE, which declined up to 2% during the session to mark its worst day since early August. It was last trading 1.4% down at a one-week low.
Barito Renewables has had an extremely volatile run since going public in October last year. In the nine months since its trading debut, the stock surged more than 1,100%, interrupted by two periods when it declined more than 50%.
Barito Rene https://reut.rs/3XQQgME
Reporting by Sameer Manekar in Bengaluru; additional reporting by Himanshi Akhand; Editing by Mrigank Dhaniwala
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
