BRIS - Rights issue priced at IDR1,000

Bank Syariah Indonesia (BRIS) will rights issue to strengthened its capital. Around 4.99bn of new shares will be offered with price at IDR1,000 per share, or below BRIS closing price at IDR1,270. With the rights issue, the bank expects to have stronger capital and offering higher RoE ing forward. BRIS expect RoE to hover within the level of 18%-20% in the mid to long term. (Source : Kontan). Comment: We like BRIS right issue as it will provide stronger capital for the bank. We believe post the right issue RoE likely to increase and provide room for the bank to offer higher dividend yield. We might also see BRIS to record stronger Tier-1 capital.