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

To: tom who wrote (212)	2/3/1998 12:44:00 PM
From: Rational	Read Replies (1) \| Respond to of 947

First Call estimates puts at 22X for the next year at the current price of 5000 Rp per share in Jakarta. I am wondering how the local buyers (mostly foreign investors) are missing your calculation. The price was unchanged in Jakarta, so was the exchange rate; but the price drops here by 3/4. I think the most unpredictable part on Indonesian stocks (as I have emphasized in all my posts) is the political uncertainty. Antara reports that the local demand for Rp has gone up; some investors are buying Rp at 8300 per USD, although sellers were selling at 11400; it closed at 10200. [At this rate TLK should be $9.8] Antara also reports that Suharto does not want to name the VP at this time -- I think foreigners are reacting to this. My only problem with this reaction is that Rp did not fall in Jakarta after the news was released and most buyers in Jakarta were foreigners; even in the off-shore trading Rp remains stable; but there must be an anticipation that Rp will deteriorate. This anticipation was there even yesterday when TLK closed in NYSE at a small discount -- but the Rp did not fall. Sankar

To: tom who wrote (212)	2/3/1998 1:16:00 PM
From: Jyoti sharma	Read Replies (2) \| Respond to of 947

Hi Tom, You can not value TLK based on depressed earnings per share. To get a better measure you have to look at the replacement value of the assets and normal earnings power. In addition telephone density in Indonesia being very low one can consider it a growth stock. I agree earnings in 1998 will be very low perhaps much lower than your estimates. Revenue in 1998 may also be much lower than 1997. One should only invest in TLK if you believe the worst is over in Indonesia otherwise TLK will trade at lower prices. IMHO the replacement value of assets per ADR is close to twenty dollars perhaps higher. If things get back to normal within a year TLK will reach that level. If Indonesia falls apart and Suharto is removed or gets sick TLK may easily trade below 5. TLK is a high risk/reward situation and a good bet on return to normalcy in Indonesia. Best wishes and good investing. Jyoti