Telkom fails to boost market

Telkom fails to boost market

JAKARTA (JP): Listing of the state-owned telecommunications firm PT Telkom failed yesterday to boost weak sentiment on the Jakarta Stock Exchange (JSX) as local speculators reaped quick profits.

Telkom was closed yesterday at its initial offering price of Rp 2,050 ($0.76), down Rp 50 from Rp 2,100 at the opening of a special trading session on Tuesday night.

The volume of Telkom trading yesterday reached 38.9 million, with PT Makindo and PT Bahana Securities, two of Telkom's domestic lead underwriters, executing the largest transactions, brokers said.

At the same time, the JSX Composite Index hit another low of 460.81 points, falling by nine points, or 1.81 percent, from the day before.

"Telkom failure to boost weak sentiment was due partly to selling pressure from local speculators trying to make quick profits," an analyst from BDNI securities said.

Telkom's listing, the largest listing on local markets, and Asia's largest listing this year, has been expected to help strengthen investors' trust in the markets.

Securities analysts said Telkom was not the one to blame when it failed to drive up the markets, especially when the global market condition was so bad these days. In addition, telecommunication stocks have been weak in the global market the last few weeks.

They said investors' sentiment to sell Telkom, to reap quick premiums, partly caused the price fall.

Reuters reported yesterday that in its initial public offering on the New York Stock Exchange, Telkom was among the most active on the exchange, with 4.4 million shares traded. The stock gained five eighths of a point to the primary price of US$18 per American Depository Share, which constitutes 20 ordinary shares.

Director of Merrill Lynch in New York, Edward Higgins, said that the small margin of price movement proved that the price had been settled for the benefit of the investors, Antara reported yesterday. (10/rid)