INDONESIA'S PT TELECOM(TLK) Message Board

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Technology Stocks : INDONESIA'S PT TELECOM(TLK)

TLK 20.93

-0.9%

Nov 21 9:30 AM EST

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To: tom who wrote (219)	2/3/1998 2:21:00 PM
From: Rational	Read Replies (3) of 947

Tom: <<Unless the tariffs are raised to account for the increased cost of capital equipment then PT Telkom should trade at a big discount to replacement cost because no one would build it in the first place as the returns would not cover the cost of capital. Replacement cost is only 1 side of the equation. >> This is true. But, the current market expectation is that the government will soon sell assets, especially banks and telcom companies. This expectation is resulting in a steady price for Telekom. The government has given many indications, but they want the prices to go up and Rp exchange rate to improve before announcing such plans. I feel at this price, it is not a very risky stock since the price replects panic. I cannot figure out the political developments and how that will affect market perception. My belief is that Suharto will not screw up and his public indications belie his true love for the business people (the Indo-Chinese minority) who made him prosperous. Sankar

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