Bimantara makes successful debut on capital market

JAKARTA (JP): The widely diversified Bimantara Citra made a successful debut during its initial listing on the Jakarta Stock Exchange yesterday, with its price rising by 45 percent at close.

The price of Bimantara shares rose sharply to Rp 1,850 (80 U.S. cents) during the first minute of yesterday's trading and closed at Rp 1,800, nearly 45 percent above Rp 1,250 set during the shares' initial offering period, with over 192.5 million shares changing hands.

Bambang Trihatmodjo, the business group's president, described the successful debut as an indication of the positive response of the public to his company, which is often criticized for its close link with the government.

"The price of Bimantara's shares already reached Rp 1,800 during the first minute of the trading. It is very encouraging and we pledge to do our best for the public," he said during a news briefing after the initial listing of the business group.

Bimantara, which operates seven business lines, encompassing radio and television broadcasting, telecommunications, infrastructure, automotive, chemical, hotel and property industries, has rapidly grown in the last five years. But most of the business group's successes have been linked to the close relationship between Bambang, the third child of President Soeharto, and the government.

Bimantara has denied such an allegation, saying that all its business practices are done through normal procedures.

In yesterday's press briefing, Bambang expressed gratitude for such criticism, saying that such an objection is good reflection for the business group's future.

Securities brokers said that Makindo, Bimantara's lead underwriter, were seen actively supporting the business group's share prices yesterday, the first day of the listing.

Peterus Tjuandi of PT KES Sinar Mas Securities said that Makindo started the transaction of the Bimantara shares with a buy order of Rp 1,800, around 40 percent above the initial offering price of Rp 1,250.

He said that Makindo also intervened when the price fell to below Rp 1,800.

Roosano Barack, a director of Bimantara Group, said that the encouraging performance of the Bimantara shares during the first day of their trading was not caused by the low level of its offering price. "It is a matter of a strong demand," he said.

Bimantara, during the public offering period last month, sold 200 million shares, around 20 percent of its enlarged shares, at Rp 1,250, with an estimated price earning ratio (PER) of 11.78 times, much lower than the average PER of around 18 times for the shares traded on the stock market.

The company's public offering was heavily oversubscribed with foreign investors' orders reaching 45 times that of available shares and those for local investors reaching 3.8 times.

Roosana said that Bimantara's share prices were not as cheap as many local securities estimated.

"Bimantara's initial offering price was expensive enough. Many foreign analysts said that the price of the company's shares should have been ideally set at a level with PER of eight times," he said, dismissing the allegation that the oversubscription of Bimantara's shares were caused by its low price offering.

He pledged that Bimantara would launch a second issue after two years to maintain the price performance of the company.

But when he was asked whether the group's founders would immediately sell their shares, Roosana said that there was no plan for the next eight months, the minimum period that founders should retain their holdings.

"After that period, it is possible that Bambang would release his shares, especially if the price is good," he said. (hen)