Bank Mandiri plans three-fold rise in rights offering

Decided to raise figure to about $776mln from $221mln due to improving economic and political conditions.

Indonesia's largest lender, PT Bank Mandiri, is set to increase the size of its planned rights issue threefold, as the benchmark market index hovers near its all-time high.

Investor appetite for assets in Southeast Asia's biggest economy remains strong thanks to a combination of accelerating growth, political stability, and prospects for an investment grade credit rating.

On Tuesday, Agus Martowardojo, Mandiri's president director, said the bank would increase the size of its planned rights issue to 6-7 trillion rupiah ($665.5-$776.4 million).

The bank had previously said it aims to raise more than 2 trillion rupiah ($221.36 million) from a rights issue either later this year or in early 2011.

"The fact that many companies are considering rights issues reflects the state of asset prices but also the increasing growth opportunities firms see in Indonesia," said Nick Cashmore, Indonesia country head at CLSA Asia Pacific Markets.

Indonesian banks are raising capital because of growing demand for funds across the board, he added, with most of it going into investment.

View the full story in Reuters.