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)