ID :
23296
Wed, 10/08/2008 - 20:41
Auther :
Shortlink :
http://m.oananews.org//node/23296
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BUYBACKS OF STATE COMPANY SHARES TO BE SPED UP: MINISTER
Jakarta, Oct 8 (ANTARA) - State Enterprises Minister Sofyan Djalil said he would speed up buybacks of state-owned company shares to maintain the stability of the prices of the companies shares and their financial liquidity.
"In the current slump of stock exchanges the buyback program is expected to be able to become a shield to prevent the share prices from falling further," the minister said at his office here Wednesday.
He said the buybacks would be a shield against a further slide in the state company share prices and prevent the public from panicking and committing speculative acts - something that would only cause the share prices to fall further.
But the buyback program should not be seen as government intervention in the stock market, he said.
"No, it is not. The problem is that the buybacks cannot be accelerated because according to regulations they must be carried out 30 days after the decisions are taken in extraordinary shareholders' meetings," he said.
The minister said the program was only for companies that had excess liquidity.
"The performance of the state-owned companies are right now very good so that there is a big opportunity for the prices of the companies' shares to increase. Unfortunately, the corporate action is hindered by technical factors," he said.
Regarding the suspension of share trading at the Jakarta Stock Exchange Wednesday morning the minister said it was a correct step.
"The suspension was based on technical considerations. If the price falls more than 10 percent a suspension is in order," he said.
He said the share market was facing a problem and many countries had taken the same measure. Russia, for instance, had suspended stock market trading for more than three days, he said.
"In the current slump of stock exchanges the buyback program is expected to be able to become a shield to prevent the share prices from falling further," the minister said at his office here Wednesday.
He said the buybacks would be a shield against a further slide in the state company share prices and prevent the public from panicking and committing speculative acts - something that would only cause the share prices to fall further.
But the buyback program should not be seen as government intervention in the stock market, he said.
"No, it is not. The problem is that the buybacks cannot be accelerated because according to regulations they must be carried out 30 days after the decisions are taken in extraordinary shareholders' meetings," he said.
The minister said the program was only for companies that had excess liquidity.
"The performance of the state-owned companies are right now very good so that there is a big opportunity for the prices of the companies' shares to increase. Unfortunately, the corporate action is hindered by technical factors," he said.
Regarding the suspension of share trading at the Jakarta Stock Exchange Wednesday morning the minister said it was a correct step.
"The suspension was based on technical considerations. If the price falls more than 10 percent a suspension is in order," he said.
He said the share market was facing a problem and many countries had taken the same measure. Russia, for instance, had suspended stock market trading for more than three days, he said.
