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)