Bimantara makes successful debut on capital market

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)