JAKARTA. Analysts believe that the free float policy on the LQ45 index will be beneficial for PT Indofood Sukses Makmur Tbk (INDF) shares, because it has a free float of more than 50%.
On August the Indonesia Stock Exchange (IDX) will only sort members of the LQ45 index based on their free float portion shares, or the portion of shares with ownership of less than 5% per investor'.
Samuel Sekuritas Indonesia analyst Suria Dharma said that INDF would benefit from the INDF has free float portion of up to 50%.
According to Suria, now the weight of INDF in the LQ45 index is 1.58%. However, when the free float rules become effective, INDF's weight will rise to 1.9%. "The weight of INDF shares will be higher," said Suria, recently.
Apart from being attractive due to the potential increase in weight, the valuation of the issuer is still relatively cheap. INDF's price to earnings ratio (PER) is 11.34 times as of Wednesday (17/7), according to RTI data. Based on calculations and analysis, Suria recommends buying INDF shares with a fair target price of Rp 8,500 per share. (AM/AR)