Bapepam urges PT Miwon to hold public presentation
Bapepam urges PT Miwon to hold public presentation
JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) has urged PT Miwon to hold a public presentation to explain the plunge in the price of its shares since their listing on the Jakarta Stock Exchange on Tuesday.
Head of the Bureau for Corporate Finance at Bapepam, Indarto, said yesterday that Miwon and its lead underwriter, PT Sun Hung Kai Securities Indonesia, must explain the shares' dismal performance to the investing public and brokers.
Miwon issued 25 million shares with an initial public offering price of Rp 1,950 (85.2 U.S. cents). However, the price fell to Rp 1,450 on listing on Oct. 31, and dropped again yesterday to a new low of Rp 1,225. Although the shares' price rise subsequently rebounded slightly to Rp 1,350, it was still Rp 600 below the initial offering price.
A director of Miwon, Bhakti Halim, said yesterday that his company was not to blame for the price drop. "The fundamentals of our company are very healthy. What happened was pure market mechanism and we could not interfere in the market," he said.
Bhakti dismissed speculation that high pricing for the IPO was the main reason for the subsequent avalanche. "The earning-per- share of Miwon was Rp 266, meaning that the price earning (PE) ratio was 8.63 times at the offering price. It's relatively low, compared with the average PE ratio for food and food-related producers, which is 10 times.
Moreover, Bhakti said, the share price didn't reflect the company's performance at all. As of last month, net sales were Rp 90 billion and pre-tax profit Rp 10 billion. "We are certain to meet the 1995 sales and net profit targets of Rp 130 billion and Rp 30 billion, respectively," he said.
Miwon, which makes food seasoning, holds 30 percent of the domestic market in the products.
"We will expand our production capacity by 12,000 tons next year and by another 12,000 tons in 1997," he added.
Bhakti blamed the share price fall entirely on market sentiment. On the Miwon listing day, most investors were chasing Telkom shares, he said. (10)