Jeewon first Korean company to enter JSX
JAKARTA (JP): Byung-Soo Park, Chairman of the Seoul-based Jeewon Group, a leading manufacturer of car stereos and satellite video receivers, feels proud in his current visit to Indonesia.
Park will be one of 40 Korean businessmen who will be guests at a luncheon meeting to be held at the Shangri-La Hotel on Sunday to honor President Kim Young-sam.
The second and apparently more important factor that makes Park more jubilant and bullish about Indonesian economic prospects, is because President Kim's visit will take place on the eve of the initial public share offering by Jeewon's Indonesian subsidiary, PT Jeewon Jaya.
Jeewon Jaya in Bekasi, West Java, an export-oriented manufacturer of car stereos, satellite video receivers, high- quality tuners and wire harnesses, will offer 6.1 million common shares, each with a par value of Rp 1,000, at Rp 4,500 (US$2.06) apiece to the investing public here.
"Though our share offering may not be as large as other companies which have been listed on the Jakarta Stock Exchange (JSX), our issue will be greatly significant because we will be the first Korean firm listed on the JSX," Jeewon Jaya's President Chung In-Hyun said yesterday.
There are now more than 300 Korean companies investing in various industrial areas in Indonesia with capital outlays of almost $4 billion, making Korea the sixth largest investor in the country.
Chung said Jeewon Jaya had signed an underwriting agreement with ten securities companies, including Nomura Indonesia as the lead manager, Asjaya Indosurya Securities, Baring Securities and seven others as co-underwriters.
Sources at the Capital Market Supervisory Agency said Jeewon Jaya would receive an effective registration statement for its share issue sometime next week.
"We expect to list our shares on the JSX on Dec.20," Chung added.
He is greatly optimistic about the market prospect of his company's shares not only because its price reflects a price earning ratio of only 7.3 times its projected earnings this year but also because its products are used by two of the most rapidly expanding industries in Indonesia-- consumer electronics and automobiles.
Analysts of the underwriting companies hope that Jeewon Jaya's step would be followed by other Korean companies, most of which are engaged in export-oriented manufacturing industries.
Committee
In a related development, Soy Pardede, an executive of the Indonesia-Korea Business Committee which will host the luncheon meeting, hopes that Korea will continue to be a major source of foreign direct investment in Indonesia.
Pardede sees President Kim's state visit as quite significant in further strengthening the political foundation for Indonesia- Korea economic cooperation.
He foresees a greater role for Korean investors in resource- based ventures such as the agro-business in addition to forest- based industries and coal and natural gas mining they have developed.
"The visit here by 40 businessmen, many of them chairmen of big business groups, is another indication of Korea's great interests in further deepening and expanding economic cooperation with Indonesia," Pardede added.
He noted that since both governments also have concluded investment guarantee and double taxation agreements, the climate for business ties has now further been improved.
Pardede also sees a broader opportunity for trade expansion because Korean trade ties with the developed countries, notably those in Europe, seem to have matured.
"Moreover, both Korean businessmen and government have now been paying more attention to Southeast Asia due to its highly dynamic economy," he pointed out. (vin)