BCA's Stock Split Is Assessed To Have A Positive Impact On Company Performance

President Director of PT Bank Central Asia Tbk (BCA) Jahja Setiaatmadja. (Photo: Instagram @jahjasetiaatmadja)

JAKARTA - Pilarmas Investindo Sekuritas analyst Okie Ardhiastama assesses that the plan to split the nominal value of shares or the stock split of Bank Central Asia (BBCA) will have a positive impact on the company's stock performance because the shares will become more liquid and affordable for investors, especially retail investors.

"Of course the management's plan to conduct a stock split can be a positive catalyst for both investors and BBCA's own shares in the future, which are more liquid and can maintain BBCA as the bank with the largest market capitalization", said Okie, quoted from Antara, Monday 2 August.

Based on information disclosure on the Indonesia Stock Exchange (IDX), BCA will conduct a stock split for ordinary shares with a ratio of 1:5. With this corporate action, BBCA's share price, which is currently close to IDR 30.000 per share, will be around IDR 6.000 per share. Retail investors can also buy 1 lot or the equivalent of 100 shares at a price of IDR 600.000 from the previous IDR 3 million for 1 lot.

"Retail is relatively more affordable, of course", said Okie.

The number of BBCA shares before the stock split was 34.65 billion shares, while after the stock split it would be 123.27 billion shares. Meanwhile, the nominal value of BBCA shares before the stock split was IDR 62.5 per share. Meanwhile, after the stock split, the nominal value of BBCA shares became IDR 12.5 per share.

BCA said that the stock split aims to increase the liquidity of the company's stock trading on the stock exchange and make the company's share price more affordable for retail investors, including the demographics of young investors so that it is expected to increase the number of company shareholders.

The company plans to seek approval from the company's General Meeting of Shareholders (GMS) in connection with the planned stock split at the Extraordinary GMS which is planned to be held on 23 September 2021. The schedule for trading shares with a new nominal value on the exchange is estimated to be in October 2021.

Indo Premier Sekuritas analyst Mino also said the stock split would make BBCA's share price cheaper even though it is still expensive in nominal terms compared to other BUKU IV bank shares.

"This stock split will make the price more affordable, and retail investors can collect it. For the psychological effect of the stock split itself, it makes the price look cheaper, so the impact will push the share price up", said Mino.