to Jakarta--if the offering was attractive."
He continues: "The biggest reason for these overseas listings is that there is a belief among Indonesian business leaders that if they have a significant number of foreign shareholders, then any future Indonesian government will be restrained from doing anything [harmful to their interests].
"Many of the major companies depend on things like forestry concessions that could be taken away with the stroke of a pen. The second reason is ego. The fad this year is to get something listed abroad and they're going to go for it."
Bankers involved with the APRIL deal believe there are logical reasons for not listing in Jakarta: "APRIL eventually will become a regional pulp and paper group," says one.
"It is impossible to list an offshore incorporated company in Indonesia and you can't restructure it into a new company because you need a three-year track record."
That said, bypassing local ownership requirements is probably also a major reason--just as companies and their financial advisers have previously searched for ways to get around other restrictions.
In March last year--in the most notable example--Indofoods, a food processing company in the Salim group, managed to circumvent domestic convertible bond regulations and Bapepam's 15 times ceiling on p/e ratios for initial public offerings in Jakarta.
UBS led a $500m equity-linked issue in the Euromarkets for Indofoods through special purpose vehicle Global Mark, which offered three-year bonds exchangeable into shares of the soon-to-be-listed Indofoods.
The pricing on the exchangeable bonds--which were mandatorily convertible six months after a domestic IPO--enabled Indofoods to raise money on a much higher rating than the 15x domestic ceiling would have allowed.
However, at the time of Indosat's flotation, the 15x p/e ceiling was suddenly lifted. It no longer applies to domestic IPOs.
DESPITE doubts over the wisdom of the overseas listings, the competition between international stock exchanges to attract Indonesian companies is intense.
Telkom is considering a listing in Tokyo--to the incredulity of some Jakarta brokers--while London is also making a strong pitch.
However, the presence of three US investment banks among the four global co-ordinators would seem to indicate that New York is the front-runner as the listing venue for Telkom's stock.
State-owned tin mining company Timbang Timbah is expected to list in London and Jakarta in an international privatisation being led by BZW. Other Indonesian companies are believed to be looking at a Singapore listing.
The relative weakness of the domestic stock market will force many more companies to seek the extra funds and liquidity that an overseas listing can provide.
But going abroad without a parallel local listing has disadvantages. Most importantly it cuts companies off from the local investor base and Asian-based research.
Liquidity in Tri Polyta shares has effectively dried up, says one broker, since many brokerage firms no longer cover the stock.
Others point to the NYSE listings of two Chinese power companies last year as a warning to Indonesian corporates caught in the offshore listing craze.
Both Chinese issues have performed badly in the secondary market. Many bankers argue that the companies might have fared better by listing in Hong Kong--a more natural home market for Chinese stocks.
It remains to be seen how the APP and APRIL share
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