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

To: Duke who wrote (105)	1/22/1998 11:51:00 PM
From: Joe	Respond to of 947

Can you imagine, taking your dollars out of indonesia banks will be severely penalized with an outrageous exchange rate of 4000 rupiah for each dollar when the on going rate is 15000 rupiah for each dollar. What a rip off in a country like that and you all still trust indonesian stocks? Good luck

To: Duke who wrote (105)	1/23/1998 6:06:00 AM
From: tom	Read Replies (2) \| Respond to of 947

Reasons why TLK is a screaming sell (apart from the fact that I can assure you that Indonesia is bankrupt (Debt to GDP 400% and rising) and you should forget about investing there for a few years anyway). - Why should the share price in Rupiah terms be at all time highs when the prospects for revenue growth have disappeared - GDP will contract by 10%+ this year? - The valuations are crazy - TLK will make US$0.20 per ADR (or less if the Rupiah continues to fall) this year which puts it on almost 35x earnings - Although Telkom is a monopoly it has no pricing power. Its tariffs are set by the government. At the current tariff levels it cannot make enough money to carry on re-investing in the business. Revenue per line would need to rise by 200% to justify re-investment. - The average income per capita is US$200. Can they really afford to spend much money on a phone given that many people cannot afford to eat? - The share price has been driven up by arbitraging of the local shares/ADRs. This will not continue forever.