State firms asked to hold Telkom shares for 2 years
State firms asked to hold Telkom shares for 2 years
JAKARTA (JP): Minister of Finance Mar'ie Muhammad confirmed yesterday that a number of state-owned companies and pension funds have been told to hold their Telkom shares for at least two years to prop up their price.
Speaking at a hearing with Commission VII of the House of Representatives, the minister said that the lock-up of Telkom shares is government policy.
"Over 3,300 individual investors bought Telkom stocks at the primary floatation. It is, therefore, important to protect them," he said.
In addition to the lock-up of the Telkom shares, members of the commission also questioned a wide range of economic issues, including the country's tight economic liquidity.
Director General for State-owned Companies Bacelius Ruru said that the news of the lock-up resulted in a significant gain in the price of Telkom shares.
But Djimanto, of the Indonesian Democratic Party, said that the lock-up policy is unfair because the rise in the price of the Telkom shares will not bring any profit to state-owned companies holding Telkom stocks.
"State firms cannot get any profit from the stock price increase because they are not allowed to sell their Telkom shares," Djimanto said.
Telkom, which provides telecommunication services domestically, made its local and overseas initial share listing debut on Nov. 15, 1995, receiving moderate investor support.
The price of the Telkom shares increased slightly to Rp 2,175 on the first day of its trading on the Jakarta Stock Exchange (JSX) from Rp 2,050 on the primary market. The Telkom shares further rose, averaging at around Rp 3,400 last week, or 65 percent above the initial public offering (IPO) price.
Ruru said that locking up Telkom shares held by state-owned companies is a one-off case. "I don't think the government will adopt such a policy for the future public offerings of other state-owned companies," he explained.
Public offering
He said the government is now preparing the public flotations of three other state-owned companies -- Bank Negara Indonesia, the national airline Garuda Indonesia and PT Krakatau Steel.
He, however, refused to explain details of the plans.
Regarding the tightening of the country's economic liquidity, the minister of finance told the House members at the hearing that the tight monetary climate was part of the government's policy to cool down the economic overheating.
He said that the tightening of the economic liquidity is essential to prevent a worsening of the country's economic fundamentals.
Mar'ie said that the rapid surge of domestic demand, fueled partly by the sharp increase in the purchase of imported consumer products, should be halted. Otherwise, the economic fundamental factors, such as inflation and the current account deficit, would worsen further. (hen)