Oct 26, 2010

No talks with Michelin, GJTL says

The management of Indonesia’s largest tire producer PT Gajah Tunggal Tbk (GJTL) affirmed that his company has not yet held any talks with Michelin regarding the speculation over the shares uplifting.
Such rumor has boosted Gajah Tunggal’s stock price as much as 7.32% to IDR2,200 per share in yesterday’s trading.
Today, the GJTL-coded stock climbed by 1.17% to Rp2,225 per share. “As far as I know, there have not been any talks regarding to that matter. Michelin still controls 10% of the share since 2004,” said Gajah Tunggal’s Director Catharina Widjaja.
Indonesia Stock Exchange (IDX) data shows as per 3- September 2010, Michelin still holds 10% share of the GT Radial-brand tire producer.
Denham Pte Ltd becomes the majority shareholder of GJTL by acquiring 47.59% shares while the remaining 42.41% owns by public.
Who will excessively buy Gajah Tunggal’s stock?
CLSA Indonesia recorded Rp14.98 billion net buy over Gajah Tunggal’s share, while OSK Nusadana bought nearly Rp7.60 billion and Reliance Securities purchased around Rp5.82 billion.
Philip Securities and Danareksa Sekuritas booked a net buy over GJTL as much as Rp4.21 billion and Rp3.71 billion respectively.
Seeing from its valuation, Gajah Tunggal stock apparently poses relatively cheap stock valuation as it only books 6.58 times of price to earnings ratio (P/E).
Such stock price was only 2.52 times over its book value as per June 2010, reaching Rp879.82 per share.

Disclosure: No position at the stock mentioned above.

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