Analysis: Odd price movements and Haji Isam’s rumored Bayan acquisition
On Aug. 15 three prominent businessmen toured a site in Kutai Kartanegara, East Kalimantan, reportedly to scout potential mining sites. They were tycoon Haji Isam, PT Bayan Resources owner Dato’ Low Tuck Kwong and defense entrepreneur Norman Joesoef. The meeting quickly sparked speculation that Haji Isam was interested in acquiring a 62 percent majority stake in Bayan Resources.
On August 15th, three influential businessmen, including tycoon Haji Isam and defense entrepreneur Norman Joesoef, toured a site in Kutai Kartanegara, East Kalimantan to investigate potential mining opportunities. The visit quickly generated speculation that Haji Isam intended to acquire a 62 percent stake in Bayan Resources, a company he partially owns.
This speculation led to a surge in the shares of companies connected to Haji Isam and Bayan Resources. Bayan Resources' shares increased by 19.97 percent to Rp 17,125 (96 US cents) per share at the close of trading on August 18th. However, the stock price later dropped by 14.9 percent to Rp 14,700 at the beginning of trading on August 19th after Bayan Resources and Haji Isam's palm oil company denied any such deal.
The peculiar aspect of this situation is the simultaneous price movement of Haji Isam's companies, unlike the typical inverse relationship between the acquiring company's and target company's stock prices. For instance, PT Dana Brata Luhur, a coal logistics company linked to Haji Isam, rose by 21.09 percent to Rp 1,665 per share on August 18th upon hearing about the potential deal.
Additionally, unrelated businesses such as fast-food operator PT Fast Food Indonesia, Jhonlin Agro Raya (a palm oil company), and PT Abadi Nusantara Hijau Investama (a nickel mining company) also experienced significant price increases on the same day: 6.69 percent, 24.88 percent, and 5.41 percent respectively. The only link between these companies was their association with Haji Isam.
Several theories have been proposed to explain this odd pattern of stock movements. One possibility is that investors anticipated synergies between Haji Isam's businesses and Bayan Resources, given Bayan Resources' coal mining operations and Dana Brata Luhur's coal logistics and distribution services. However, this explanation does not fully address why the rally extended to companies in unrelated sectors like fast food, palm oil, and nickel.
A more plausible explanation may lie in Indonesia's highly concentrated ownership structures within the capital market.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- Analysis: Odd price movements and Haji Isam’s rumored Bayan acquisition thejakartapost.com
