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

To: tom who wrote (219)	2/3/1998 2:21:00 PM
From: Rational	Read Replies (3) \| Respond to of 947

Tom: <<Unless the tariffs are raised to account for the increased cost of capital equipment then PT Telkom should trade at a big discount to replacement cost because no one would build it in the first place as the returns would not cover the cost of capital. Replacement cost is only 1 side of the equation. >> This is true. But, the current market expectation is that the government will soon sell assets, especially banks and telcom companies. This expectation is resulting in a steady price for Telekom. The government has given many indications, but they want the prices to go up and Rp exchange rate to improve before announcing such plans. I feel at this price, it is not a very risky stock since the price replects panic. I cannot figure out the political developments and how that will affect market perception. My belief is that Suharto will not screw up and his public indications belie his true love for the business people (the Indo-Chinese minority) who made him prosperous. Sankar

To: tom who wrote (219)	2/3/1998 2:23:00 PM
From: Jyoti sharma	Respond to of 947

Tom, I agree with you on all the points you have raised. Investment case for TLK is based on Indonesia again getting back to normal with in a year and prosper there after. If you are going to analyze TLK based on the situation at hand, it does not make sense to invest in any Indonesian company. As far as the business of TLK is concerned, it's sound due to their franchise and monopoly. To invest in TLK you have to assess the political and economic climate not the fundamentals. Good Investing. Jyoti