Indosat gets cool response

Indosat gets cool response

JAKARTA (JP): The state-owned international telecommunications
company PT Indosat's public offering received a surprisingly cool
response from domestic investors yesterday, the first of its 10-
day offering period.

A number of counters specially set up at Senayan stadium for
the share offering did not receive a significant number of
buyers.

A scant few investors came to either collect and return order
forms.

The public offering of the company, which will be listed on
the Jakarta and New York stock exchanges, had been much awaited
and many securities brokers feared that investors' priority to
buy Indosat shares would cause a decline in share trading on the
Jakarta Stock Exchange (JSX).

Indosat officials at the Senayan counters said that many
institutional buyers had earlier applied directly for the order
forms to Danareksa Securities, the lead underwriter, before the
public offering period.

"That's why only a few people came here. They are here just to
return the order forms," an official said.

Indosat plans to sell 7.75 percent of its 517.75 billion
common stocks on the domestic market and another 27.25 percent in
New York.

Indosat's shares, with a face value of Rp 500, will be sold on
the domestic market at Rp 7,000 (US$3.29) each during the
offering period, which will be closed on Oct. 11.

Securities analysts said that Indosat's shares are too
expensive compared to shares of a number of other companies which
are now available on the primary market.

The price earning ratio (PER) of Indosat shares reaches almost
26 times the company's net earnings per share in 1993, as
compared to between nine and 10 times of the other shares during
an initial public offering, and between 17 and 20 times for old
bluechips. (hen)