Indonesian billionaire Prajogo Pangestu faced a significant setback on Tuesday as his fortune plummeted over 20%, amounting to a staggering $11.4 billion in a single day.
The decline was attributed to the sharp drop in shares of his companies, Barito Renewables Energy and Chandra Asri Pacific, falling 20% each. Despite this drastic decrease, Pangestu maintains his status as Indonesia’s richest individual with a net worth of $42.1 billion, down from $53.5 billion the previous day.
“Market Sentiment Shift”
Analysts suggest that the decline in stock prices reflects a shift in investor sentiment. Both companies, with ticker codes BREN and TPIA, were considered overbought, and the drop occurred as investors seized an opportunity for profit-taking, according to analyst Ezaridho Ibnutama.
“Overvaluation Concerns”
Ibnutama notes that the current share prices of BREN and TPIA are overvalued based on current metrics, despite positive outlooks due to expansion plans. The analyst predicts a rebound in shares by the end of the first quarter of 2024, reaching 5,300 rupiah and 6,800 rupiah, respectively. However, even at these lower prices, Barito Renewables maintains a substantial premium and a lofty price-to-earnings multiple.
“Strategic Acquisitions and Expansion”
Barito Renewables, Indonesia’s largest geothermal energy producer, recently secured an agreement to acquire UPC Sidrap Bayu Energy, a major wind producer in Indonesia. The acquisition is anticipated to conclude in the first quarter of 2024. Meanwhile, Chandra Asri Petrochemicals, now Chandra Asri Pacific, expanded its portfolio through acquisitions and is developing its second global-scale petrochemical complex, CAP2, slated for completion in 2027.