Mandiri Sekuritas is in an enviable position in Indonesia’s domestic market. The firm boasts a market-leading deal team, responsible for some of the biggest and best equity transactions in the country in years. But its strength in trading should not be overlooked either.
The securities house, a subsidiary of Indonesian lender Bank Mandiri, has a clear lead over its rivals in equity capital markets deals, bagging not just more deals than any other firm in the country but also bigger ones.
In 2017, for example, there were only two ECM deals in the country worth more than the equivalent of $200 million – a $366.4 million follow-on in the shares of Chandra Asri Petrochemical and a $405.8 million block sale in the shares of Sarana Menara Nusantara. Mandiri Sekuritas worked on both deals, and in the case of Chandra Asri’s trade, it was the only domestic player to win a mandate.
Indonesia’s primary equity market has been slower this year, hurt by a spike in volatility that has knocked emerging markets and that has hit Indonesia in particular. The Jakarta Stock Exchange Composite Index is down more than 6% this year. (It perhaps did not bode well that the stock exchange quite literally suffered a fall at the start of the year when a walkway at the Indonesian Stock Exchange building collapsed.)
But despite the slowdown, Mandiri Sekuritas has still shown it is best in class. The firm teamed up with Citi, Credit Suisse and DBS to close a $141.2 million IPO in Medikaloka Hermina, a hospital operator. Its other deals, all small in themselves, were still enough to put it well ahead of the competition by late August. Mandiri has closed five deals worth $376.23 million; its closest Indonesia rivals, Indo Premier Securities and Bahana Securities, had managed the same number of deals between them.
Mandiri cannot boast the unchallenged dominance in trading that it does on the primary execution side, but its broking ability should not be questioned. It executed more trades than any other broker by value in 2017, according to the Indonesian stock exchange. In the first quarter of 2018, it ranked first by number of shares traded and second by value.
Indonesia has endured a difficult year. A national election in April 2019 promises more volatility to come. But although the slowdown has forced Mandiri to swallow a drop in fee revenues in its primary business, the firm remains at the top of the tree among domestic securities houses.