Product & Services

Equity Brokerage

2011 was started with a strong pessimism by stock market traders . Analyst and traders in the  stock markets were significantly influenced by the economic condition of European Countries and the United States. This was proven when the Jakarta Composite Index (IHSG) was started in 2011 it sharply fell to 3,455.12 or a decrease by 7% compared with the closing point of index level on the closing of 2010, which was 3,703.51.

But the downfall of the stock index did not last long, the awareness of a better economic condition by the announcement of investment grade of the Indonesian economy recovered traders' trust. Investors began to make selective purchases of stocks that have good fundamental. Conditions recovered until August  2011 when the stock index flew to its highest level which was 4,193.44.  

The next month, the strength of Indonesian economic fundamental was tested when the European crisis hammered the Jakarta Composite Index (IHSG) to its lowest level in 2011 to 3,316.13. Based on these positive outlook and the fact that the derailing factors were external the stock index were realigned to positive territory reaching 3,821.99 at the closing of 2011.

The Indonesia Stock Exchange recorded the total value of transaction reaching IDR 1,223.44 trillion or an increase of IDR  4.95 trillion. An increase by 4% compared to 2010 value which was Rp 1,176.24 trillion. The Company recorded a decrease of transaction value by 15% from Rp 27.842 trillion in 2010 to Rp 23.940 trillion in 2011. But there was an increase of trading frequency by 20% from 1,006,773 to 1,206,185.

This fact indicates that there were a distribution of transaction to more clients who are retail customers, part of the Company's client base. In 2011 the number of online trading clients have reached 1,500 clients and they have contributed to 20% of the company's total transaction value.

To increase the number of customers and transaction value, Reliance is consistent in spreading its wings by establishing new branch offices and Investment galleries in a number of locations. In 2011, We have opened 4 new branch offices in Taman Ratu - West Jakarta, Pontianak, Balikpapan and Makasar and IDX Corners and Investment Galleries in President University in Cikarang, West Java, Tanjungpura Universities in Pontianak, West Kalimantan and Jember University in East Java.

Underwriting

In 2011, there were 25 issuers providing Initial Public Offering (IPO), more from what was issued in 2010, which were 23. Despite the number of issuers were more, the underwriting value in 2011 is below than the previous year. In 2011 the underwriting value was IDR 19.6 trillion, a decrease by 34% compared to 2010, which was IDR 29.7 trillion. A side from the 2011 financial crisis there were difference size of companies debuted on the trading floor. There were a number of State Owned Enterprises which stops their IPO plan in 2011 as a precautionary step anticipating the negative impact of the world market movement and to aim for higher pricing.

The Company was very active in pursuing joint underwriting, it participate in 14 of 25 IPO in 2011 or more than 50% total syndication with the underwriting value IDR 61.57 billion. This value has increased sharply compared to the previous year, IDR 11.08 billion. The increase coupled with the underwriting activities as selling agent of ORI and Sukuk, resulting in increased revenue to IDR 3.23 billion, an increase of 48% compared to the year 2010 which reached IDR 2.19 billion.

Reliance has a big capacity to do underwriting activities. For 2011 and subsequent years, the Company will continue plays an active role in helping companies or corporations to seek in the capital market, as well as pursuing to participate as a joint underwriter, for either equity or bonds.

The underwriting division will continue to grow by pursuing and exploiting feasible opportunities to increase the revenue through underwriting and financial advisory services.

The year 2011 proved to be a remarkable year for bond market as it generated a much higher rate of return than that of equity market. Fear that bond market would be in a deep slump amid Europe's sovereign debt crisis and stalled economic recovery in the U.S. failed to materialize. Domestically, inflation expectation shot up at the beginning of the year, compelling Bank Indonesia to raise its benchmark interest rate (BI Rate) to 7% and maintained a neutral stance by keeping BI rate unchanged until October 2011.

Lower interest rate policy and deteriorating fiscal conditions in advanced countries opened up opportunity for emerging markets to be an attractive destination for investor seeking higher yield. In the case of Indonesia, well co-ordinated prudent fiscal policy and credible monetary policy has produced a sustainable high economic growth in the last decade. Even the global financial crisis and the still unfolding Europe's sovereign debt crisis failed to make a dent on Indonesia's economic growth. Foreign Capital Inflow inundated Indonesia's capital market, notably bond market. While most of government bond of Euro zone countries experienced worsening credit rating and shunned by investors, Indonesian Government Bond (IGB) enjoyed substantial improvement in risk perception and chased by foreign investors. By the end of 2011, foreign ownership constituted 31% of all tradable IGB, up slightly from 31% in December 2011. As a result, IGB yield curve shifted downward all across maturity.  

Booming domestic bond market did not translate into better performance by our fixed income division. Reliance's transaction value in 2011 amounted to Rp 791.30 billions, down sharply from Rp 1.865.62 trillions. However, income from capital gain surged 32%
To Rp 3.30 billions from Rp 2.50 billions in previous year.

As a testament to its sterling reputation as trusted Securities company, in 2011 Reliance continued to be appointed as Selling Agent for Government retail bonds. Being a selling agent allows the company to develop vast network with sub selling agents and other financial institutions. In February 2011, the company acted as Selling Agent for Retail Sukuk 003 (SR003) of which Rp 195.70 billions successfully sold by the company. In line with the Corporate Social Responsibility (CSR) theme of Sukuk Retail 003, ? Bersama Sukuk Negara Ritel Peduli Pendidikan Anak.? The company earmarked some of the fee from being selling agent to assist children of victim in Merapi volcano explosion in the form of providing school equipment.

In November 2011, the company also participated as a selling agent for Government Retail Bond 008 (ORI008) The issuance of ORI008 was met by over-subscription by public, thereby enabling the company to sell ORI008 with the value of Rp 460,00 billions. Similar with SR003 campaign, the company earmarked some of the fee from being selling agent for CSR activities which happened to be related to green movement.

To increase revenue contribution from fixed income division, the company kept widening network and cooperation with other institution in financial market such as investment manager, pension fund, and commercial bank, domestic and foreign alike. In addition, expansion in transaction facility was also key element in improving fixed income division performance. The company was provided bigger intraday facilities by numerous banks and explored any new opportunities to boost transaction.