Duke:
Most wealthy people in the Indonesian Finance Community (especially the ethnic Chinese) want Suharto to leave and are speculating on Rp to topple him, IMO. I believe they will not succeed because the US, Japan and Singapore have realized the problem and want to help Indonesia with Suharto in command; not because they like Suharto, but because he is better than Communists taking over Indonesia. I would not be surprised if China is behind the game of subversion. Whatever China could not achieve 30 years ago has suddenly appeared easier to accomplish. The Indonesian finance markets are dominated by Chinese. Many Indonesians suspect that these Chinese have been colluding (after the Rp began to slide) with the Communist Chinese to subvert Indonesia by forcing Rp to collapse. IMO, there is a lot of subtle pressure on Suharto. But, these tactics have taken Suharto closer to the US, Japan and Singapore.
After receiving the unequivocal support from US, Japan, Singapore, and Germany, Suharto appears to be seriously committed to execute reforms. I would not be surprised if Suhato dismantles all the privileges granted to his cronies and children. This is because Suharto is a very ego-centric guy and at this age he wants his legacy to remain indelible. Given that he has fortified his power locally (most Indonesians like him) and internationally (international leaders want him out of necessity), he will (IMO) do everything needed to achieve his last goal -- that is not to wipe out his achievements on making Indonesia prosperous.
This is my own political analysis and is not intended to offend anyone, especially my Chinese friends. TLK closed ($9.675) at a discount today: the correct price should have been $10 = Rp 5000 * 20 / 10000. TLK is like a mini-Indonesia (17% of market cap); it is a solid, relatively advaned company. The real cost of creating such a company is enormous. Compare this with the Korean ADRs (SKM, PKX, KEP) which are selling at 100% premiums. People are talking about political risk -- these people are mainly from the finance community who are mostly Chinese who want Suharto to go. Most Indonesian political experts agree that this uncertainty is exaggerated. Thus, IMO, it is a great opportunity to own a piece of Indonesia if someone is willing to take the "risk."
Sankar |
