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

To: Jyoti sharma who wrote (196)	2/2/1998 7:54:00 PM
From: Rational	Read Replies (1) \| Respond to of 947

Jyoti: The local P/E for Telkom is 26 and for IIT 34. Telkom's USD debt is small in relation to their size. If the govt privatizes Telkom (they may have to for paying govt debt) by selling more than 50% (as opposed to current 25%) of TLK; then TLK will rise in value. I recall some Jakarta analyst saying that TLK should not go down in value (when the market was down) because it had virtually no USD debt (but I would appreciate if you can help me find this). In any case, the only potential for an appreciation in the value of TLK will be due to Rp/USD. Mr. Yen was emphatic that Rp is very undervalued and that it should rise to 4000-5000 Rp/USD before strengthening further. I expect a concerted action by Japan, Singapore and US to prop up Rp to 5000 level which would still be 50% of the value before its collapse and at par with the devaluation of local currencies. These countries tried to help soon after the IMF plan was announced in Jakarta raising it to 6700 Rp/USD; but Suharto screwed up by indicating that Habbie would be the VP; Habbie is most hated by the finance community because he is the epitome of wasteful spending. Japan, Singapore and US relaxed their efforts and then Rp collapsed to 17000 per USD. But, this was sufficient to warn Suhatro that Habbie was not acceptable. This is the risk: if Suharto appoints a candidate who understands the importance of reforms, then Rp will shoot up to 5000 per USD, otherwise it will languish. I believe (after the recent statement by Mr. Yen) that Suharto is going to do it right this time -- all the reform announcements are great, just the VP announcement must be conducive to a better confidence. Sankar