JakartaPost-Jan 6, 2023
Shares of national flag carrier Garuda Indonesia have suffered a precipitous drop in the company’s first days back on the stock market, as it struggles to regain the trust of investors after a solvency crisis last year. On Tuesday, the Indonesia Stock Exchange (IDX) lifted a trading suspension on Garuda’s shares that had been in place for one and a half years following the airline’s default on US$500 million worth of sukuk (sharia-compliant bonds) in 2021. Garuda shares plummeted to Rp 175 (1.18 US cents) apiece on Thursday after suffering an almost 7 percent drop for two consecutive days, the steepest one-day drop allowed before the bourse freezes trading of a company for the day. Analysts said the decline could linger for some time, as investors were expected to continue dumping shares of the airline. “Many investors [feel] Garuda’s performance has yet to reach a positive zone,” said Nafan Aji Gusta of Mirae Asset Securities on Thursday. Nafan added that Garuda’s stock price was in a “markdown phase”, a sustained downward trend, and said it remained unclear when the phase would end. Desmond Wira, a trader and author of books on finance, added that market sentiment was in the negative zone more generally, so many investors would avoid higher-risk companies such as Garuda. He noted that while Garuda’s financial situation was better than it had been, this was mostly because it had managed to avert pressing liabilities. Investors still wanted to see whether the airline could perform over the long term. Read more at: https://www.thejakartapost.com/paper/2023/01/06/garuda-nosedives-on-return-to-idx.html.
