Semen Gresik shares 'like cat in a sack'
Semen Gresik shares 'like cat in a sack'
The Jakarta Post, Jakarta
Shares of state-controlled PT Semen Gresik (SG), the country's
largest integrated cement maker, will continue to be viewed as
overly speculative by investors because there is not sufficient
information to assess the value of Gresik's shares.
Stock analyst Hendra Bujang of Mega Access Capital Securities
said on Tuesday that buying SG shares was like "buying a cat in a
sack" as investors could not fully appraise the shares following
an audit problem at the company's rebellious subsidiary PT Semen
Padang.
"Investors are unable to asses SG's shares because Semen
Padang has not yet finished its audit. The shares will always
remain a subject of speculation ... For conservative investors SG
shares are worth being avoided," said Hendra.
Hendra explained that the shares had often increased when bad
news was reported as speculators would try to lift the share
price to lure other investors to buy the stocks before they
themselves pull out.
The ensuing fire sale by the speculators will cause heavy
losses to inexperienced small investors or newcomers.
The Jakarta Stock Exchange (JSX) suspended trading in shares
of SG on Monday after the firm's auditor issued disclaimers for
its 2002 and 2003 financial accounts.
SG auditor PricewaterhouseCoopers (PwC) refused to give an
opinion on the firm's financial accounts due to unaudited
financial figures from the company's subsidiary, PT Semen Padang.
Gresik's shares were last traded at Rp 8,000 before the JSX
halted trading during the morning session.
The JSX said the shares would be suspended until SG's annual
shareholders meeting on June 30 or until SG received a
satisfactory opinion from PwC after completing the audit of Semen
Padang.
SG has been facing difficulties in finalizing its 2002
financial report, which in turn affected the completion of its
2003 report, due to problems with the rebellious West Sumatra-
based Semen Padang, which has demanded that it be separated from
the parent company.
The government controls 51 percent of SG shares, 25.5 percent
is owned by Mexico cement giant Cemex SA and 23.5 percent by the
public.
Due to the delay, the government is currently planning to
change the composition of the company's current management, which
will be discussed during the company's shareholder meeting.
A source at the Office of State Ministry of State Enterprises
said that the government was likely to maintain SG's current
president director Satriyo, and would probably dismiss other
directors following the audit problem.