[Kabar-indonesia] JSX extends BNI suspension amid investigation

[JoyoNews at aol.com]

The Jakarta Post
Tuesday, October 3, 2006

JSX extends suspension of BNI stock trading amid investigation 

Andi Haswidi, The Jakarta Post, Jakarta

The Jakarta Stock Exchange ordered trading in BNI stock to remain suspended 
Monday as several brokers underwent questioning about an unusual jump in the 
value of the lender's shares of late.

"They are now being questioned in relation to their transactions," JSX 
president director Erry Firmansyah said of the brokers, while refusing to identify 
them. However, he did confirm that the investigation was the reason for the 
suspension in trading. 

"The stock will be suspended until further notice," he said. 

The JSX first suspended trading in BNI shares Friday, arguing that this was 
necessary to protect investors. 

BNI's stock price had increased by 77.24 percent over only three weeks, 
starting on Sept. 11 at Rp 1,340 or around 14 U.S. cents and rising to Rp 2.375 on 
Sept. 28. 

The government currently owns 99.11 percent of the shares in BNI, while the 
remaining 0.89 percent is held by retail investors. 

The rapid increase of the share price appears to have been triggered by 
speculation in the market about a government plan to divest more BNI stocks. The 
bank's recent efforts to conclude the negotiations on debt settlements with 
problem borrowers were also considered by some analysts to have been behind the 
price hike. 

The market expects the government to divest at least 20 percent of its shares 
in BNI. 

"If the government divests less, then the impact will not be significant. It 
should at least 20 percent of the shares," Rohma Fitri Murniawati of BNI 
Securities told The Jakarta Post on Monday. 

"The government owns more than 90 percent of the shares. It is very likely 
that it will divest a significant tranche of shares, as it did with Bank Mandiri 
and Bank Rakyat Indonesia," she said. 

As of the end of August, the government still held 68.91 percent of the 
shares in Bank Mandiri and 57.38 percent in BRI. 

Commenting on the suspension, Rohma said that it was in the best interests of 
the public as there was no certainty about whether the sale of BNI shares 
would go ahead. 

"But, I think it would be best for BNI to sell its shares to a strategic 
partner that can contributed more added value to the bank instead of just 
additional capital," she said. 

"If the strategic partner was an international operator, then the bank could 
benefit from the addition of a new international network plus valuable 
transfers of knowledge," she argued. 

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Joyo Indonesia News Service
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