Many mining firms qualified to float shares

Many mining firms qualified to float shares

JAKARTA (JP): Many local mineral resource-based companies are
qualified to float their shares on the domestic stock market,
analysts said.

Bahana Securities analyst Adriansyah Chaniago said yesterday
that mining company shares could be more attractive than those of
industrial companies.

He said unlike industrial and manufacturing companies, mining
firms were relatively immune to the monetary crisis, which had
caused over a 40 percent drop in the rupiah against the U.S.
dollar since the turmoil hit the country early July.

"Most revenues of mining firms are generated in dollars while
their costs are in rupiah. The rupiah depreciation has created a
benefit for mining firms." he said.

I Ketut Wirabudi, also an analyst at the securities firm, said
that the country's mineral firms should take advantage of the
situation by listing their shares on stock exchanges.

Many mineral companies, such as PT Kaltim Prima Coal, PT Bukit
Asam and PT Freeport Indonesia, would profit by floating their
shares, he said.

There are four mineral-based companies now listed on the
Jakarta and Surabaya stock exchanges: nickel mining company Inco,
tin mining company Tambang Timah, gold and nickel mining company
Aneka Tambang, and oil company Medco. Tambang Timah is also
listed on the London stock exchange.

Both Adriansyah and Wirabudi, however, said that most local
investors were not familiar with the companies' advantageous
position because local stock exchange listing regulations had
made it difficult to float their shares.

The Capital Market Supervisory Agency (Bapepam) had assigned
the Surabaya Stock Exchange (SSE) to specialize in the mining
sector, but it had not yet issued a special ruling to lure more
mining firms to list their stocks in the exchange, Adriansyah
said.

The requirement to post profits for the last three consecutive
years had remained a major problem for mining companies.

"The Surabaya bourse should not impose such a listing
requirement if it wants to attract mining companies," he said.

An official from the SSX, Ignatius Girendroheru, told The
Jakarta Post yesterday the exchange was now working to change the
regulation.

He said that the SSX still needed more specific regulations
for listing mining firms because the industry was characterized
by high uncertainty.

"Mining companies in Australia, for example, can list their
shares in the ASX even though they have not recorded a profit
yet," he said.

He said that the SSX had the opportunity to accommodate more
mining companies in Indonesia because the country had vast mining
resources.

Earlier reports said that the SSX had been working with
foreign stock exchanges, including the Australian Stock Exchange
and the Toronto and Alberta stock exchanges in Canada, to attract
mining companies. (aly)