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The share price of PT Bank BRI Syariah Tbk (BRIS) has continued to rise since the beginning of July. In four months, the price had more than tripled. However, it has plummeted rapidly in the past two days. What happened to this subsidiary of PT Bank Rakyat Indonesia (Persero) Tbk?
On July 1, the BRIS share price was still at Rs 306 per share. Its share price continues to rise to Rs 1,500 on October 20, 2020. This means that in less than four months, the bank’s share price has quadrupled.
However, in the last two days its price has fallen rapidly to 13.3%. In fact, due to the depth of the drop, BRIS shares were subject to automatic rejection lower trading rules (ARB) on Wednesday (10/21).
The rally in BRIS shares was due to positive sentiment from the government, which would merge (merge) the sharia state bank subsidiaries. Furthermore, in this merger, BRIS became the recipient entity, which meant that BNI Syariah and Bank Syariah Mandiri would merge into BRIS.
However, this positive sentiment faded immediately after BRIS announced the merger plan in its prospectus on Tuesday (10/21). As a result of the presentation of the prospectus, BRIS shares immediately fell 7% to Rp 1,300 per share.
The Head of Research, Samuel Sekuritas, Suria Dharma, assessed that the fall of BRI Syariah shares was influenced by the scheme chosen in the merger process. Initially, the market predicted that BRI Syariah’s book value per share (BVPS) will increase, with various assumptions and calculations.
However, following the announcement of the merger plan, this prediction turned out to be different. In fact, at current prices, the valuation is cheaper. The merger plan described in BRI Syariah’s prospectus shows that the largest beneficiary is the parent company of Bank Syariah Mandiri, namely PT Bank Mandiri (Persero) Tbk (BMRI).
“BRIS will then consolidate into BMRI. BMRI’s assets are expected to increase by 8.5%. Meanwhile, BBRI will decrease by 3.7% and BBNI by 5%,” he said. Katadata.co.id, Thursday (10/22).
The merger plan is expected to take effect on February 1, 2021. Although the new name has yet to be determined, BRI Syariah has been designated as the company to receive the merger. However, because Bank Syariah Mandiri is larger in value terms, Bank Mandiri will become the majority shareholder (51.2%) in BRI Syariah after the merger.
BNI Syariah shareholders PT Bank Negara Indonesia (Persero) Tbk (BBNI) receive 25%. Meanwhile, the current shareholders of BRI Syariah will be diluted. BRI, which currently owns 73% of BRI Syariah, its ownership will be diluted to just 17.4%. The share of public shares in BRI Syariah will only remain at 4.4%.
In its prospectus, BRI Syariah offers options to minority shareholders who do not agree with this merger decision to sell their shares to BRI no later than November 19, 2020. BRI will buy these shares at a price of Rp 781.29 per share at fair value. In fact, BRI Syariah’s share price is currently Rs 1,300 per share.
The value of the company will increase, stock prices are not expensive
The head of research at multinational Sekuritas Edwin Sebayang, also president of the Association of Indonesian Securities Analysts / AAEI, said that technically the rise in share prices is very fast, it will definitely peak and fall again. The rise in BRI Syariah’s share price led to several gap priced at Rp. 1125 to Rp. 1200.
“Such a rapid rise also makes BRIS shares overbought, so it needs to cool down, so it’s not surprising that there is profit taking,” he said. Katadata.co.id, Thursday (10/22). Because the price has risen quite high, many investors have made a profit (profit taking) by selling their shares.
Basically this merger of Islamic banks is very good. In their statement, three state-owned banks explained that the merged bank would rank 7 or 8 on the list of the 10 largest banks in Indonesia in terms of assets. BRIS will be the only Islamic bank on this list.
BRIS will also become Indonesia’s largest sharia bank in terms of assets, with total assets reaching Rs 214.6 trillion. In the ranks of the world, BRIS will be included in the list of the 10 largest Islamic banks in the world in terms of market capitalization o market capitalization.
According to Edwin, the fall in the price of BRIS shares was caused by many misguided and rather misleading issues circulating at the moment. This issue is related to the fair value of BRIS after the subsequent merger.
In fact, Edwin thinks that the current price of BRIS shares is not expensive yet. Due to the calculation, the fair price of BRIS after the merger was around 1,900 rupees. “So the current fall in BRIS shares is an opportunity or opportunity to buy these shares because I am optimistic that in the future BRIS shares may hit a low of Rp. 2,800,” he said.
He gave an example of Bank Mandiri, which was the merger of four banks, namely Bank Exim, Bank Bumi Daya, Bapindo and Bank Dagang Negara in 1999. When it entered the stock market and began trading its shares on the stock exchange of stocks in 2003, its share price was just Rs 675 per share. Now, the share price of BMRI has reached 5,525 rupees.
