Sampoerna shares drop 5.9% in one day on foreign selling

JAKARTA (JP): The price of PT HM Sampoerna shares dropped by 5.9 percent yesterday on foreign investors' weakening sentiment, but dealers were uncertain of the major trigger for the decline.

Sampoerna shares on the Jakarta Stock Exchange (JSX) closed down by Rp 1,325 (56 U.S. cents) at Rp 21,125 yesterday.

Several dealers contacted by The Jakarta Post said foreign investors were still confused about the company and its founder, Putera Sampoerna, in regards to his major move to enter the automotive industry by acquiring a 12.5 percent stake in Astra International.

Such a negative reaction was already reflected in the market early last week following the announcement about the stake acquisition.

Those dealers, however, offered different opinions on the main reason for yesterday's price plunge.

"I think the price drop is closely related to Moody's decision to downgrade the credit rating of Sampoerna Finance B.V.'s US$200 million notes," a dealer with a Japanese-based brokerage said.

He said the negative sentiment was intensified by the company's announcement that it had signed a US$400 million loan facility with Credit Suisse-Labuan Branch and Brancoft Holdings B.V.

Another dealer from a London-based brokerage, however, argued that the downgrade of Sampoerna Finance B.V.'s credit rating was not the major trigger of the price plunge.

"I prefer to note that investors might have been more cautious on Sampoerna following its decision to cancel its plan on an international road show focusing on its future development," the dealer said.

He said the cancellation of the road show has sparked speculation that Sampoerna should wait until rumors on its stake acquisition in Astra are cleared up.

A Sampoerna spokesman, Jonathan Zas, told the Post yesterday that the $400 million loan facility obtained recently was allocated to finance the company's development plans, such as expansion in domestic and overseas markets, and to finance its inventory.

Jonathan also confirmed that the company will hold an extraordinary shareholder meeting on Nov. 2, but declined to explain the agenda of the meeting.

"We will announce the agenda two weeks before the meeting," Jonathan said.

Meanwhile, Putera Sampoerna said in a statement dated Oct. 4 to the JSX that as of Oct. 2, he personally still owned a 5.3 percent stake or 24 million shares in HM Sampoerna. The figure included 200,000 shares which were donated to cooperatives last year, but have yet to be registered in the name of the cooperatives due to a technical problem. (alo)