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

To: tonto who wrote (431)	3/4/1998 3:30:00 PM
From: Susan Saline	Read Replies (2) \| Respond to of 947

Hi all Looking for re-entry soon. Would like a position at 7 7/8 to 8 Sue

To: tonto who wrote (431)	3/5/1998 4:37:00 AM
From: tom	Read Replies (1) \| Respond to of 947

My personal view is that Semen Gresik is the one to be looking at if you are into cement. It trades at an EV/Tonne of capacity of about US$30/tonne. Given that it costs around US$150/tonne to build new capacity you are buying it at 20% of replacement cost - not bad. The trouble is that there is huge oversupply of cement both in Indonesia and in Asia generally. Export prices have fallen to US$20 per tonne and although domestic prices were recently raised by 50% the reduction in demand will be massive (-50% this year at least). This means that their return on investment on both exports and domestic sales will be very low. It is also majority owned by the government and therefore it is extremely inefficient and so this lowers profitability as well. Foreign Cement companies have been buying into the region. Holderbank bought a stake in Semen Cibinong (the smallest listed cement company) -and Lafarge bought a stake in Republic Cement in the Philippines (paying US$135/tonne of capacity). Normally, they do not massively undercut prices in the domestic market but in this era of oversupply they may be forced to. I think there must be easier ways to make money over the next few years but as an investment for your grandchildren? Maybe....