Underwriters to 'cooperate' on share prices

Underwriters to 'cooperate' on share prices

JAKARTA (JP): The Association of Indonesian Securities
Underwriters agreed yesterday to "cooperate" in maintaining stock
prices above their Initial Price Offering (IPO) levels.

"We are ready to cooperate to keep prices above the levels set
during the primary offering period," L.G. Rompas, the chairman of
the association, said following a meeting with the chairman of
the Capital Market Supervisory Agency (Bapepam), Bacelius Ruru.

Rompas and several other members of the association met Ruru
to explain the association's working agenda and the association's
capital market responsibilities.

The Bapepam chairman sent letters to nine securities companies
last week asking them about their commitment to preventing the
prices of the stocks which they manage from falling far below IPO
levels.

Prices of several stocks underwritten by the nine securities
companies -- PT Sigma Batara, PT W.I. Carr Indonesia, PT
Pentasena Arthasentosa, PT Standard Chartered, PT OCBC Sikap
Securities, PT Pregrine Sewu Securities, PT Danareksa Securities,
PT Nomura Indonesia and PT Gadjah Tunggal DBS Securities -- have
dropped by 25 percent from their IPO price levels.

Rompas said that the association would appeal to its members
to set share prices at realistic levels to prevent them from
falling on the secondary market.

"It is the only realistic thing for us to do," he said.

Rompas said that the association would also cooperate by
setting the timing for the floating of stocks on the market with
a view to avoiding oversupply.

However, he ruled out any form of direct intervention to
control stock prices.

"Buying back shares in order to prop up their price is
illegal, since it is a form of price manipulation," he said,
adding that the sluggish condition of stock prices on the local
market over the past two weeks was not due to poor fundamental
factors of the companies concerned. Rather, he said, the low
prices were due to the poor condition of stock trading on the
global market. (hen)