CMEL buying shares in local securities firm

JAKARTA (JP): Caribbean-based investment consortium Capital Middle East Ltd. (CMEL) is buying up to 19 percent of shares of securities firm PT Bhakti Investama to pave the way for its expansion into the Indonesian capital market.

CMEL's director Nigel Oakes said on Thursday the stake in the publicly listed firm would be acquired in stages to guard against disturbing the local stock market.

"This afternoon CMEL is going to sign a 5 percent share purchase of Bhakti Investama, and within 10 days CMEL should acquire a total of 19 percent of Bhakti's shares," Oakes told a news briefing.

He said the purchase of the securities company's stake would help the Caribbean firm's operation in the Indonesian market.

"We consider Bhakti Investama to be our strategic partner in Indonesia. Our further investment in Indonesia will be through closely collaboration with Bhakti."

He said the Indonesian market remained promising despite reports of unrest and fears of growing political tension ahead of the country's June general election.

"CMEL is confident that after the June election, overseas investors will burst into Indonesia, but by then we will not get the best deals," he said.

CMEL has committed to investing US$250 million to $300 million in listed companies with a strong management team, fine previous trading record and which were undervalued, Oakes said.

"Besides those criteria, CMEL will have three categories of investment, namely, property, loan default and loan rescheduling," he said.

"CMEL sees that a large portion of property shares in Indonesia are badly undervalued. We also see there are many companies with high competency which are experiencing a loan default and loan rescheduling. These companies cannot operate merely because of financing problem. We want to help these companies."

CMEL, with manages portfolio investments of $2.2 billion worldwide, expects a 20 percent return per year from its Indonesian investment. He added that the company booked an average return of 18.2 percent per year for the last five years.

The company, which acquires funding from wealthy individuals mostly in the Middle East, has also invested in other Asian countries, including the Philippines, Thailand and Bangladesh, according to Oakes. (02)