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Technology Stocks : INDONESIA'S PT TELECOM(TLK) -- Ignore unavailable to you. Want to Upgrade?

To: John J H Kim who wrote (41)	1/20/1998 9:15:00 PM
From: Duke	Respond to of 947

Jakarta to unveil major new banking reforms Sharp hikes in capital requirements, new deposit insurance scheme, bank mergers Reports by S N Vasuki in Jakarta THE Indonesian government will unveil sweeping new reforms in the banking sector that will sharply increase minimum capital requirements of local banks, establish a new deposit insurance scheme and pave the way for increased mergers, sources told BT yesterday. ÿ The reforms, to be unveiled later this week, are part of a radical restructuring of the financial sector proposed by the International Monetary Fund (IMF) and the World Bank. Though the new measures will not lead to further bank liquidations, the sources said that the government's over-riding objective was to reduce the number of players in Indonesia's banking industry. The proposed reforms cover four broad areas: The new minimum paid-up capital requirements for local banks will be increased from 150 billion rupiah (S$31.3 million) to 2 trillion rupiah, more than a ten-fold increase. Banks will also be expected to further increase their minimum capital to 5 trillion rupiah within three years of the rules coming into force. Bank Indonesia (BI), the central bank, is in the process of establishing a National Deposit Insurance Scheme which will protect the interests of small depositors. Small depositors will be classified as those having less than 20 million rupiah in bank deposits. The central bank is also working on new guidelines which will encourage mergers in the domestic banking industry. However, the government is believed to be reluctant to ease regulations that will allow foreign banks to acquire more than a 49 per cent stake in listed banks. Sources told BT that by end-February, the central bank will have approved at least six major mergers involving large and small local banks. BI is also discussing the establishment of a new regulatory framework governing the banking industry. There are widespread perceptions that BI was lax in supervising the banking industry and the new measures will streamline the reporting system of commercial banks. New rules on the accounting treatment of non-performing loans are being worked out. "The multilateral institutions were horrified when they examined BI's books in November," said a source. "The central bank did not have a proper system to figure out if banks were in breach of regulations. Moreover, there were suspicions that a few bank staff may have wilfully concealed crucial data on the health of a few small banks." The new reforms in the banking sector, particularly the higher capital requirements, comes at a crucial moment for Indonesia, now witnessing an unprecedented economic crisis. Rating agency Standard & Poor's yesterday raised alarm bells by warning that Indonesian banks needed an "urgent" US$15 billion (S$26 billion) recapitalisation because the rupiah's precipitous fall was leading to rising borrower defaults. "Banks that have suffered serious capital depletion, to the extent that they are technically insolvent, may, under normal circumstances, be able to continue operating provided they have sufficient liquidity. However, the tight liquidity situation prevailing in Indonesia precludes this option for many banks," S&P warned. "Given the scarcity of private sector capital in Indonesia, recapitalisation must be sourced either from the Indonesian government or foreign investors." In a related move, S&P yesterday placed its long-term rating on listed Bank Internasional Indonesia on a credit watch with negative implications. On Monday, BII had proposed a merger with listed Bank Dagang Nasional Indonesia and three smaller banks. S&P added that the negative credit watch placement primarily reflects the risks associated with the integration phase of the acquisition.

To: John J H Kim who wrote (41)	1/20/1998 9:18:00 PM
From: Duke	Respond to of 947

Suharto to run for 7th term, hints at Habibie for VP PRESIDENT Suharto yesterday indicated his willingness to serve a record seventh term and hinted that his choice for vice-president will be State Minister for Research & Technology B J Habibie. As Mr Suharto's re-nomination was regarded as a foregone conclusion, the rupiah's plunge below 10,500 against the greenback yesterday morning was not seen as a reaction to Mr Suharto's intention. Rather, it was continuing reports of social unrest stemming from food shortages in East Java that depressed the currency. However, by day's end the rupiah had clawed back some lost ground to trade at about 10,150. Jakarta stocks also staged a smart afternoon rally, with the benchmark Jakarta Composite Index ending 9.01 points, or 2 per cent, higher at 448.04. Still, the rupiah's volatile fluctuations are a worrying trend for analysts who feel that this could seriously undermine President Suharto's political standing. The president accepted the ruling Golkar grouping's nomination at a meeting with House Speaker Harmoko (who heads the ruling party), Home Minister Yogie Memet and Armed Forces Chief General Feisal Tanjung. "President Suharto will accept the people's trust and is ready to be re-nominated at the MPR (People's Representative Assembly) to become Indonesia's president from 1998 to 2003," Mr Harmoko told reporters. "The president said that he will be doing this for the sake of the country although he is sacrificing the interests of his family." Political observers were intrigued by the new criteria for selecting Indonesia's next vice-president which were outlined by Mr Harmoko. As the position was "important and strategic", Mr Suharto has recommended that the new vice-president should understand "technology and industry" and also be capable of maintaining national unit y, Mr Harmoko said. Observers feel that the potential vice-presidential candidate could be narrowed down to only one person -- State Minister for Research & Technology B J Habibie. Dr Habibie also heads the national aircraft maker, IPTN. However, they cautioned against concluding that Mr Suharto had already decided to pick Dr Habibie. "I think this is a shrewd gesture on Mr Suharto's part," said a political analyst. "He will now assess the opposition to Dr Habibie's candidacy and decide on another candidate." The Armed Forces faction in parliament has dismissed suggestions that it has endorsed Dr Habibie's candidacy. Other potential candidates include incumbent Try Sutrisno, Information Minister Raden Hartono, and State Minister for National Planning Development Ginanjar Kartasasmita. Meanwhile, Central Jakarta police yesterday reported that they had arrested an alleged bomb-maker after a crude, home-made device accidentally exploded at a rented apartment in the Indonesian capital. Army Chief of Staff General Wiranto disclosed that the blast was linked to an "anti-establishment movement" that has links with the outlawed People's Democratic Party. Local newspapers yesterday reported that many towns in East Java remained tense over fears of a fresh outbreak of violence. Several towns around the coastal city of Banyuwangi witnessed rioting over the weekend as people attacked food stores to protest against the sharp increase in prices.

To: John J H Kim who wrote (41)	1/21/1998 1:06:00 AM
From: Jay Fisk	Read Replies (1) \| Respond to of 947

Bloomberg: Rupiah Plunges 15% Top Business/World News Wed, 21 Jan 1998, 12:50am EST Rupiah Plunges 15% to New Low on Political Concern "The Indonesian rupiah plunged 15 percent to a record low as investors rejected President Suharto's plans to run for a seventh term and his nomination of a protege for vice president. ''Investors don't like the idea of Suharto staying on for one-more term. He has nothing new, no fresh ideas to offer the country anymore,'' said Danny Kang, vice president for regional currencies at Bank Brussels Lambert. ''What's more, worries about his health will keep the currency volatile in the coming months.'' The rupiah fell to as low as 12,000 a U.S. dollar. That's its lowest since the currency began trading in 1971. The rupiah has lost 53 percent of its value against the dollar this year." Hmmm. . . Buy, Sell, or Hold ??? Today's buy was TLK.BB (Feb 10 Calls) at 7/16. If market significantly lower will extend timeframe out a few months. j