Telkom shares floated
Telkom shares floated
JAKARTA (JP): State-owned domestic telecommunications company
PT Telkom made its local and overseas initial share listing debut
last night, receiving moderate investor support.
At the opening of a special trading session at the Jakarta
Stock Exchange at 9:30 p.m. (14:30 GMT), Telkom shares opened at
Rp 2,175 (95.06 U.S. cents) against the initial offering price of
Rp 2,050. The high was Rp 2,200 and the low Rp 2,125.
On the New York Stock Exchange, the price of Telkom was quoted
at US$18.75 per American Depository Share (ADS), up from the
primary price of $18 per ADS.
One ADS represents 20 ordinary shares.
Telkom floated 19 percent of its 9.33 billion shares on the
New York, London, Jakarta and Surabaya stock exchanges
simultaneously.
Minister of Finance Mar'ie Muhammad, Minister of Tourism, Post
and Telecommunications Joop Ave and a number of high-ranking
officials monitored the first minutes of Telkom's stock market
debut from the JSX's trading floor.
"I think a 3 to 4 percent rise, as happened to Telkom shares,
is something normal," Marie said in a television interview.
The state-run television station TVRI broadcast live on
Telkom's local and overseas listing, believed to be Asia's
largest single privatization this year.
Mar'ie said Telkom's management should strive to keep its
share price stable in the long run so as the price on the
secondary market would remain above its initial public offering
price.
"I ask Telkom's management team to further improve the
management of the company because, given the large size of the
listing, Telkom has a significant impact on local stock markets,"
Mar'ie said.
JSX President Hassan Zein Mahmud said Telkom accounted for 16
percent of the JSX market capitalization of Rp 138.26 trillion.
Every one point change in the price of Telkom would move the JSX
index by 0.8 point, he said.
The fate of Telkom's flotation is believed to have an impact
on the government's privatization plans for the future.
"We will see what next state-owned companies are ready to be
privatized," Mar'ie said.
Telkom is the 238th issuer on the JSX and the fourth state-
owned privatized company after PT Semen Gresik, PT Indosat, and
PT Tambang Timah.
Telkom's fate had been left hanging following a market slump
in Jakarta and the region, and after a dismal debut last month of
state-owned tin miner Tambang Timah. Timah's price fell some 17
percent from its initial offering price of Rp 2,900 ($1.30) after
only five days of trading.
Stimulation
Telkom is expected to stimulate a bearish domestic market and
possibly reverse the downward trend.
On Monday, one day before Telkom's listing, the JSX's index
hit a seven-month low of 467.35 points, compared with a 1995 high
of 519.53 in August.
On Monday, Telkom cut its offering price and downsized its
issue. Telkom set its shares at Rp 2,050 (90 U.S. cents) each on
domestic markets, compared with an initial price of Rp 2,800, and
at $18 per ADS on overseas markets.
Telkom also scaled down its flotation to 30 million ADS from
its initial offshore offering of 70 million ADS.
Securities analysts said Monday's radical move appeared to
have turned around dull market sentiment.
"The fate of our market is in Telkom's hands. If Telkom's
price falls just like other shares, I'm afraid our market will be
deserted," one broker said.
Mas Achmad Daniri, a director of the JSX, told The Jakarta
Post that the price-cut and the downsizing of the overseas offer
should be viewed positively.
"It doesn't mean that Telkom was not attractive but it's all
to do with market conditions. Global underwriters and the
Indonesian government realized that it was useless to sell all
allotted shares," Daniri said.
Daniri said global underwriters preferred to wait until the
international market has recovered. "It's an excellent strategy,"
he said. (10/rid)