INDONESIA'S PT TELECOM(TLK) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : INDONESIA'S PT TELECOM(TLK)

TLK 21.12

+1.3%

Jan 30 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: cody andre who wrote (758)	7/3/1998 9:40:00 AM
From: tom	Read Replies (1) of 947

I agree that it is a bit strange that we listen to the people who couldn't see this crisis coming (and still can't explain why it is so bad) when they tell us that Asia will never recover etc etc. I have looked at Indonesia for some time and I was also caught out by the severity of the downturn and I am still amazed at the mess it is in now. However... Compared to Mexico, Indonesia is much, much worse. Why? Well for a start Mexico didn't actually have much debt when it was bailed out by the IMF (Debt/GBP was around 40% compared to 200-300% in Indonesia) and the debt was mainly government issued and so it was fairly easy to restructure. In Indonesia it is lent to many different private companies and so the restructuring is a nightmare. Also Mexico has always been a basket case that is periodically bailed out by the IMF as its economy was a mess. No one was particularly surprised that it had turned to the IMF for another hand-out. Indonesia had had a very clean economic record and it was a huge embarrassment all round when it was forced to go to the IMF (which is why Suharto was so arrogant about the whole thing). Mexico also was able to count on an economically strong neighbour, the US, to act as the importer of last resort. Indonesia has Japan who is the biggest lender in Indonesia (US$26bn reported) and is its biggest export market. In 1995 Mexico was the only bail out in the region. In Asia you have 3 official bailouts and the rest of them going down the tubes as well. In Mexico you had some sort of plan for cleaning up the banks and bad loans, In Indonesia you have none. The economy will contract by around 20% this year which is probably one of the largest contractions ever seen in an economy of Indonesia's size. The Food Minister, A.M. Saefuddin, told reporters that 50% of the Indonesian population will be living below the poverty line by the end of 1998. 50%!!!. That's 100m people who earn less than US$36/month. That's the most tragic economic figure I have read. He also estimated that GDP per capita was now at the same level as it was in 1976!!! How many phones did Indonesia need then??? I love Indonesia and I hope it recovers soon (I am out of a job if it doesn't) but I really think it will take 10 years for it to get out of this mess. I don't have any positions - long or short - in Indonesia . I haven't even talked about the political situation and the threat of hyperinflation which TLK is not protected against because the case against it is so negative that you don't need to. The stock will be volatile and day trading will be possible but I don't think its a good idea to stay in it for too long. Incidentally I thought Telmex was a great buy in 1995 and I would still prefer it to TLK today.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next