SOE Shares Affected by Selling Pressure
Monday, 12 February, 2007 | 16:45 WIB

TEMPO Interactive, Jakarta: During last week, investors released their share portfolios of state-owned enterprises (SOEs).

As a result, SOE shares were hit by selling pressure and caused a drop in the JSX composite stock price index by 40.06 points (2.25 percent) from 1,780.31 to 1,740.32.

This was the lowest index level listed since January 15 this year.

The fall of index was triggered by the drop in price of Timah's shares by 8.18 percent, Bank Rakyat Indonesia’s by 6.80 percent, Bank Mandiri’s by 6.73 percent, Indosat’s by 4.92 percent, Telkom’s by 4.71 percent and Bukit Asam’s by 4.0 percent.

Semen Gresik's share price also dropped by 2.97 percent, Adhi Karya’s by 2.50 percent, BNI’s by 2.20 percent, Antam’s by 1.92 percent and the State Gas Company’s (PGN) by 1.09 percent.

An anonymous capital market analyst said that share investors were irritated because the government and politicians have intervened in SOEs.

“Losses caused by the Jakarta flooding have become a momentum for investors to offer their shares up for sale,” he told Tempo in Jakarta last week.

Capital market analyst Edwin A. Sinaga added that the government should allow the boards of directors of SOEs to work more professionally.

The government's task is only to back up SOEs that have become public companies in prioritizing profitability.

Edwin pointed out that non-performing loan ratios may increase should bankers apply no principles of caution.

If loans are disbursed in massive amounts, many banks could collapse, as happened in 1998.

“The bottom line is that banks have their own levels of caution in disbursing loans,” he said.

MUCHTAR WIJAYA (PDAT)