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Technology Stocks : INDONESIA'S PT TELECOM(TLK)
TLK 20.68+1.0%Nov 7 9:30 AM EST
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To: Solon who wrote (413)2/24/1998 12:50:00 PM
From: tom  Read Replies (2) of 947
 
Valid point about the GDP. I can't be bearish on inflation and GDP/capita but I think that the poverty argument still holds true although as you say Indo has vast natural resources. However, I don't know how much of these valuable resources will find their way overseas. Although Palm Oil exports are banned (as it is much more profitable to sell it abroad) it is possible to smuggle it out of the country. Will other commodities, such as rice, see undersupply as traders try and capitalise on the price differentials?

What do you reckon?

PS I agree that 12,000 is not the current exchange rate - I was quoting from some investment research. However I find that when I deal in Rupiah in size (>US$2m) then the price I get is no where near the Reuters quote although this has improved in the last couple of weeks.

Moreover, if Indo puts in a currency board at say 5000 (unlkely now I know) then interest rates will go to 200% to defend the peg. If they do nothing and don't come up with a credible alternative (extremely likely) then the currency will go to 100,000 in record time. Either way, the economy implodes. Only a month ago the Rupiah was considered worthless by almost everyone. In another month the same thing could happen......
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