State-Owned Securities Companies Asked To Study Buyback

Jakarta (Antara Bali) - The  state enterprises  ministry  has asked three state-owned securities companies to study the possibility of buying back state-owned companies' shares in the capital market.

"The request was made as the price of shares is now very low," the ministry's secretary, Mahmudin Yasin, said after meeting with the House of Representatives' Commission VI here on Monday.

Yasin said the three-state owned securities companies namely Mandiri Sekuritas, Bahana Securities and Danareksa Sekuritas in line with their fields were requested to give recommendations based on their study.

The composite index of the Indonesia Stock Exchange has dropped significantly in the past week making the price of some shares to slump.

The drop in the index was caused by market worries over the impact of current global financial crisis due to an economic decline in the US and Europe.

The index in the afternoon session on Monday (Sept 26) was recorded at 3,232.06 down from 3,426.35 on Friday.

Yasin said actually the decision to buyback was a corporate action taken according to the financial capacity of the companies concerned.

"However, the enterprises ministry as the power of shareholders is allowed to give an advice. What is important is the results of analysis presented by the three state-owned securities companies are accountable," he said.

He said none could assure that the index would rebound or would even go down further.

"In view of that we are waiting for recommendations from the three securities companies to with regard to the right time to buyback the shares," he said.

A total of 18 state-owned companies have enlisted themselves at the Indonesia Stock Exchange to control 26 percent or around Rp840 trillion of total market capitalization.(*)