Sale of Telkom boosts investment weighting<\/p>\n
Tantri Yuliandini, The Jakarta Post, Jakarta<\/p>\n
Last week's sale of 11.9 percent of the shares of the state-
\nowned telecommunications company, PT Telkom, has been given a
\nboost thanks to Indonesia's investibility weighting, a senior
\nanalyst from UBS Warburg said.<\/p>\n
"This means fund managers will be putting more money into the
\ncountry, which would put more pressure to buy in the market, and
\nincrease stock prices," associate director of UBS Warburg's
\nresearch department Ray Anthony told The Jakarta Post Tuesday.<\/p>\n
He said that the FTSE average weighting for Indonesia compared
\nto the rest of the world has increased to 0.03 percent from 0.02
\npercent prior to the sale, meaning investors' money circulating
\nin Indonesia now represents 0.03 percent of all money circulating
\naround the world.<\/p>\n
FTSE is a London-based index calculation specialist.<\/p>\n
Besides Japan, Indonesia's weighted average in Asia increased
\nto 1.04 percent from 0.93 percent previously, while in Asia
\nPacific it increased to 0.67 percent from 0.60 percent.<\/p>\n
The government sold 11.9 percent of its shares, or 1.2 million
\nshares, in PT Telkom on Dec. 7 at Rp 2,600 per share, or
\ndiscounted by 3.7 percent of the market price, bringing in US$300
\nmillion.<\/p>\n
Prior to the sale, the government had owned 66.19 percent of
\nTelkom.<\/p>\n
Despite beliefs that the shares were undervalued, and
\ncriticisms that the government should have waited until prices
\nrose, Ray said that the timing was perfect to take advantage of
\nthe current shift in investors' sentiment towards growth and
\nIndonesia as a country.<\/p>\n
"The best time to sell would have been in August, just after
\nMegawati was appointed president, but then it would be more
\ndifficult to find a buyer, because her credibility is not yet
\ntested," he said; apart from the performance of the company
\nitself, he added, investors were concerned about the political
\nand economic situation of the country.<\/p>\n
Ray also said demand for the company was high, but that there
\nwas marked by a drop off in demand above the Rp 2,600 level.<\/p>\n
Furthermore, he said initially that the deal size was between
\n$125 million to $250 million, and priced at a discount of between
\n4 percent and 6 percent.<\/p>\n
Of the 95 investors who bought Telkom, some 36 percent were
\nAsian investors, 33 percent were from the United Kingdom and
\nEurope, while 17 percent from the United States, and 14 percent
\nfrom Indonesia, he said, adding that the biggest local buyer was
\nJamsostek.<\/p>\n
UBS Warburg constituted 34.7 percent of the sale, Merril Lynch
\n31.7 percent, Goldman Sachs 19.8 percent, and PT Bahana
\nSecurities constituted 13.8 percent of the sale.<\/p>",
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