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)