Indosat books another success in local marts
Indosat books another success in local marts
JAKARTA (JP): The state-owned international telecommunications
company Indosat recorded another triumph during the first day of
the trading of its shares on the Jakarta and Surabaya stock
exchanges yesterday after booking a successful debut on the New
York Stock Exchange (NYSE) the day before.
As soon as the morning trading session opened yesterday,
securities brokers thronged to the board of orders for Indosat
shares and their price jumped by almost 30 percent to Rp 9,000
(US$4.12) each in less than five minutes from their primary
market price of Rp 7,000 ($3.20).
The price of the Indosat shares, however, failed to sustain
its upsurge, fluctuating only between Rp 8,700 and Rp 8,500 in
the afternoon session as local investors began to take profits.
It closed at Rp 8,475 (US$3.80), slightly higher than the
closing price on the NYSE.
The increase propped up the JSX (Jakarta Stock Exchange)
Composite Index to 8.3 points higher at 518.97, as compared to
510.62 the previous day.
Minister of Finance Mar'ie Muhammad and other high ranking
officials witnessed the listing and the first day's trading of
Indosat shares on JSX.
Indosat's entry on the two local stock exchanges made trading
activities frantic, with almost all investors focusing their
attention on the newcomer.
Market officials likened the trading rush to the euphoric
situation sparked by the entry of Barito Pacific Timber last
year.
Demand
Securities analysts, however, said the demand for Indosat
shares was less strong than that for Barito, a timber giant in
the country.
"Barito's share price gained around 30 percent during the
first day of its listing, far higher than that recorded by
Indosat," said an executive of a Japanese securities company.
He, however, said that the price of Indosat shares will be
more stable not only due to its dual listing on the NYSE and the
domestic capital market but also its strong business
fundamentals.
Indosat's business will continue to grow in line with the
expansion of the Indonesian economy, said an executive of Daiwa
Institute Research.
"Investors mostly buy shares due to their prospects, not on
their low PER (price earning ratio)", he said when asked if the
company's high Price Earning Ratio (PER) would discourage buyers.
Indosat received strong support from American investors during
the first day of its listing on the NYSE Tuesday. The price of
Indosat's American Depository Shares (ADSs), each comprising 10
share units, reached US$37.50 before ending the day at $37.18, 16
percent higher than the price base set during the primary
offering.
Hasan Zein Machmud, the president of the JSX, expected that
Indosat's successful debut on both the NYSE and local exchanges
would encourage other large state corporations to follow suit.
The overseas listing of Indosat helps promote the Indonesian
capital markets into the world's major financial centers.
Indosat's floating is billed as the largest Asian issue listed
on the NYSE, and the largest company traded on the local
exchanges.
Indosat sold around 7.75 percent of its 1.03 billion common
stocks on the domestic market and another 27.25 percent in New
York during the primary offering period early this month.
Indosat's shares, with a face value of Rp 500, were sold on
the domestic market at Rp 7,000 (US$3.20), as compared to its
international price of $32.05 per each 10 stocks or per ADS.
(hen)