Telkom hoped to sell 34.5m ADRs
Telkom hoped to sell 34.5m ADRs
JAKARTA (JP): Foreign securities companies expect the state- owned domestic telecommunications company PT Telkom to launch its second offering of 34.5 million American Depository Receipts (ADR) on foreign markets this year.
"I think before October this year is the most appropriate time for Telkom to offer the other 34.5 million ADRs of the 70 million ADRs initially planned," president of PT Daiwa Indonesia Securities, Mitsuo Kiyokawa, told The Jakarta Post over the weekend.
One ADR equals 29 shares.
After October, Kiyokawa said, the markets will be very busy with the initial public offerings and listings of international companies.
He cited the example of the Italian and German telecommunication companies, which plan to raise US$13 billion in fresh funds from international capital markets, including the Tokyo Stock Exchange.
According to Kiyokawa, many other infrastructure companies, including those operating in telecommunications, will enter the international markets.
Asked whether other foreign securities firms have the same expectation, he said, "I think yes. They are waiting for the second offering of Telkom."
The Indonesian government, the shareholder of Telkom, initially planned to sell 70 million ADRs on the New York Stock Exchange (with share listing), the London Stock Exchange (listing) and the Tokyo Stock Exchange (public offering without listing).
But then it decided to reduce the total international offering to only 34.5 million ADRs, of which 11.5 million ADRs were offered through the New York market, 11.5 million ADRs in London and 11.5 million ADRs in Tokyo.
On the domestic market, Telkom cut its offering price to Rp 2,050 (90 U.S. cents) from the Rp 2,800 initially planned.
Securities analysts attributed the radical move to the dull market sentiment during the offering period.
"They preferred to wait until the international market has recovered. It's an excellent strategy," a director of the Jakarta Stock Exchange, Mas Achmad Daniri, said.
However, Setiawan Sulistiono, a member of Telkom's Team for Investor Relations, told the Post over the weekend that up to now the government has no plan to float the other 34.5 million ADRs on foreign markets.
"There is no such plan in the near future," he said.
Unsuccessful
Kiyokawa was of the opinion that Telkom was not successful in terms of fund raising. "It failed to come to the expectation," he said, adding that the allocation of the shares on the foreign markets was not quite right.
He pointed out that on the New York and London capital markets, the shares were actually undersubscribed. But in Tokyo, despite the fact that Telkom made only a public offering without listing, the shares were oversubscribed.
"The Japanese market is very strong. It can absorb about 10 to 15 million more of Telkom's shares," he noted.
Recently, the director for listing supervision of the Tokyo Stock Exchange, Eisuke Nagatomo, told the Post that Japanese investors were no longer parochial and concentrating on Japanese stocks, but were becoming broad minded, displaying an interest in Asian companies.
Due to this change in interest, the Tokyo Stock Exchange made some amendments to the law last January to facilitate the listing of foreign shares, particularly those from other Asian countries that see a growing need for capital from abroad.
"The Tokyo Stock Exchange could actually create its own price for Telkom shares if the company was listed on the market. But since it is a public offering without listing it has to follow the prices of the other foreign markets," he said. (13)