Mega-rich Bakrie burned as liquidity crisis ripples into Indonesia
Jakarta (ANTARA News) - Share trading in six companies owned by Indonesia's richest man was suspended Tuesday as the effects of the global liquidity crisis rolled into Southeast 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 told AFP.
Agravating that is 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.
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. (*)
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PubDate: 10/07/08 15:52
