The chatter about potential bubbles in emerging-market equities is growing louder. Investors in Indonesia, which boasts one of the world’s best-performing markets so far this year, are certainly (irrationally?) exuberant.
The past two days have seen more than US$1bn raised in two IPOs in Jakarta, with today’s listing of noodle maker Indofood CPB worth almost double the previous year’s total for all Indonesian IPOs. Some other recent listings have already doubled in value, such as hotelier Bukit Uluwatu Villa and Bank Jabar Banten, both of which listed in July. Meanwhile, telecoms group Sarana Menara Nusantara has surged by a dizzying 700% since listing in March. Many more issues are in the pipeline, if only for supply to keep up with demand.