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)