AGL 41.65 Increased By ▲ 0.15 (0.36%)
AIRLINK 127.40 Decreased By ▼ -0.60 (-0.47%)
BOP 6.66 Increased By ▲ 0.40 (6.39%)
CNERGY 4.14 Increased By ▲ 0.01 (0.24%)
DCL 8.56 Increased By ▲ 0.12 (1.42%)
DFML 40.83 Increased By ▲ 0.14 (0.34%)
DGKC 87.10 Decreased By ▼ -0.80 (-0.91%)
FCCL 33.82 Decreased By ▼ -0.28 (-0.82%)
FFBL 65.98 Decreased By ▼ -0.35 (-0.53%)
FFL 10.50 Decreased By ▼ -0.06 (-0.57%)
HUBC 109.59 Increased By ▲ 0.89 (0.82%)
HUMNL 14.82 Increased By ▲ 0.36 (2.49%)
KEL 4.86 Increased By ▲ 0.21 (4.52%)
KOSM 7.78 Increased By ▲ 0.45 (6.14%)
MLCF 42.50 Decreased By ▼ -0.22 (-0.51%)
NBP 61.38 Increased By ▲ 0.54 (0.89%)
OGDC 182.82 Increased By ▲ 3.85 (2.15%)
PAEL 25.41 Decreased By ▼ -0.29 (-1.13%)
PIBTL 6.23 Increased By ▲ 0.17 (2.81%)
PPL 148.61 Increased By ▲ 2.46 (1.68%)
PRL 24.90 Decreased By ▼ -0.01 (-0.04%)
PTC 16.25 Increased By ▲ 0.11 (0.68%)
SEARL 69.60 Decreased By ▼ -0.60 (-0.85%)
TELE 7.35 Increased By ▲ 0.13 (1.8%)
TOMCL 36.45 Increased By ▲ 0.25 (0.69%)
TPLP 7.84 No Change ▼ 0.00 (0%)
TREET 15.48 Decreased By ▼ -0.11 (-0.71%)
TRG 52.60 Increased By ▲ 2.24 (4.45%)
UNITY 26.95 Increased By ▲ 0.05 (0.19%)
WTL 1.25 Increased By ▲ 0.01 (0.81%)
BR100 9,860 Increased By 65.4 (0.67%)
BR30 30,055 Increased By 408.3 (1.38%)
KSE100 92,519 Increased By 497.6 (0.54%)
KSE30 28,806 Increased By 141.1 (0.49%)

Share trading in six companies owned by Indonesia's richest man was suspended Tuesday as the effects of the global financial crisis rolled into south east Asia's biggest economy, dealers said. The six Bakrie Group-owned companies had dropped by between a quarter and more than 40 percent as the Indonesian market took a 10 percent dive Monday after a week-long holiday at the end of the Muslim holy month.
Dealers said the exchange was seeking an explanation for sharp declines in the suspended shares, which account for six percent of the Indonesian bourse in terms of market capitalisation. The companies belong to or are controlled by billionaire tycoon and welfare minister Aburizal Bakrie, a powerful member of the Golkar party which dominates President Susilo Bambang Yudhoyono's ruling coalition.
Economist Pande Raja Silalahi said the companies had been hard hit by lower global commodity prices flowing from weaker demand in the United States. "The price of crude palm oil has declined, so has the price of coal. So the decline in Bakrie-linked companies, such as Bumi Resources, was predictable," Silalahi said.
That is being aggravating by the apparent mass selling of shares in over-leveraged Bakrie-linked companies by creditors, said Standard Chartered senior economist Fauzi Ichsan. Bakrie had offered the shares as collateral for loans but a dipping share price on the back of lower commodity prices appeared to have forced creditors to cash in their holdings, Ichsan said, while emphasising this is only one possible explanation for the dramatic drop.
Shares in holding company Bakrie & Brothers dropped 41 percent Monday, while Bakrie Telecom slumped 26 percent, palm oil company Bakrie Sumatra fell 35 percent, Bakrieland Development lost 26 percent, Energy Mega Persada fell 33 percent and coal miner Bumi dived 32 percent. The stock market hit could also leave the normally well-connected Bakrie without his usual aura of political and business invincibility, another senior economist said.
"There are two types of Indonesia businesses. The ones that learned from the (1997 Asian financial) crisis and the ones that didn't learn from it," the economist said, requesting anonymity. "And the Bakries didn't learn from it. They leveraged heavily and their main businesses are coal, real estate and palm oil. These three sectors are having a correction and they are being seriously hit," he said.
However another senior economist, former government advisor HS Dillon, said Bakrie's continued political influence means his business future is sound. "He will never be in trouble. These guys, Aburizal Bakrie and (fellow senior Golkar politician Vice President) Jusuf Kalla are having the time of their lives. These guys are making money, a lot of money," he said.

Copyright Agence France-Presse, 2008

Comments

Comments are closed.