Bumi turning off investors, say analysts
The Jakarta Post, Jakarta
The Bakrie family-controlled PT Bumi Resources' much-hyped deals that then flop are costing investors and may have tarnished the image of Indonesia's stock market, market regulators and analysts say.
Jakarta Stock Exchange (JSX) president Erry Firmansyah warned that publicly listed companies which showed a lack of commitment and dirtied the water of their corporate action plans would only be punished by the market.
"My word is my bond," Erry told Antara, saying that maxim was the corporate world's most sacrosanct pledge.
"The investing public is sure to punish such a company by dumping their shares. Market regulators also have at hand rules of conduct to impose sanctions."
Bumi signed a deal in March to sell stakes at its coal mining subsidiaries PT Kaltim Prima Coal and PT Arutmin units for US$3.2 billion and promised to pay dividends of Rp 190 (2 U.S. cents) a share from the divestment proceeds.
The company then unveiled that it would merge with the country's second largest publicly-listed oil and gas firm, PT Energi Mega Persada, to jointly take on the liquid coal business after the divestment in the two mining units had been completed.
The announcement of the plans, which were later canceled or delayed, has caused sharp fluctuations in the prices of both Bumi and Energi Mega shares.
Bumi and Energi Mega are controlled by the family of Coordinating Minister for the People's Welfare Aburizal Bakrie.
Analyst Edwin Sinaga from Kuo Kapital Raharja said investors were likely to take big losses after Bumi's recent volatile showing on the market.
"Bumi has over time made big promises without delivering any one of them," he said. "All of this is bad for investors, especially when Bumi's shares have been suspended," Edwin said.
JSX suspended the trading of Bumi's shares on Aug. 25 but allowed partial trading of the company's shares to resume Thursday. Rumors abound that investors have been dumping Bumi shares at discounted prices on the black market to cut further losses.
"Under this situation, a sell recommendation (of Bumi's shares) would be proper, once the suspension has been lifted, and advising other investors to stay clear of holding the shares," analyst Teuku Hendry Andrean of Mega Capital Indonesia told The Jakarta Post.
He said the case would negatively affect Bumi's market outlook, and possibly other companies in same group and in the oil and gas sector. An international reaction in the market, however, depended on regulators' positive action in the case, he said.
Bumi's shares fell 2.7 percent Thursday in partial trading after the 13-day suspension.
The stock, which closed at Rp 750 on Aug. 24, fell to 730 rupiah, according to Jakarta Stock Exchange data, after buyers and sellers negotiated a price before reporting it to the bourse.
About 66.2 million shares exchanged hands. The stock fell as much as 6.6 percent earlier in the day.
The company's shares were suspended after it scrapped the $3.2 billion coal mine sale after disputing valuation and payment schedules with the potential buyer, the JSX has said.