Saturday, January 13, 2007

PGN crash, insider trading

I got some calls early Friday after I posted the information about major delay of gas pipeline linking South Sumatra & West Java (SSWJ) built by PT Perusahaan Gas Negara (PGN) Tbk. I didn't realize that information had been around for a while and triggered almost 38% drop in the share price. I got the information on Thursday evening, like everybody else.

"It's a mini Enron," an analyst at European-based investment bank said.
"What's up?"
"Just imagine almost 40% drop in days after government divested 5% shares at Rp11,300."
"I thought the whole market has been under global pressure."
"No, it's specific Indonesia & PGN. Some of us think PGN might hide more information about its performance in their balance sheet!"
"I heard the management with their MSOP & employees with their ESOP had the information kept for themselves for so long. You gotta investigate this, a potential insider trading case," an analyst for US-based firm said.
"Wish I could. Do you have data to support?"
"We could provide!"
"That's great. BTW, it must be a blessing in disguise for the Malaysian investor who claimed that he offered to buy PGN shares at Rp12,000 and government's advisors declined the offer, right?"
On Friday, right after many aware of the PGN situation, 186 million shares changed hands to make it the single largest transaction in the market at Rp1.4 trillion. Macquarie Securities dumped 57 million shares, followed by Deutsche and CLSA at 17 million and 14.7 million shares respectively.
On Sunday, PGN management denied accusations of hiding material information, including the 3-month delay of SSWJ.
It looks all fine if you read the press statement. PGN predicts gas delivery would increase significantly from 338 MMSCFD in 2006 to 555 MMSCFD in 2007 and 919 MMSCFD in 2008. But the management didn't disclose financial impact of the delay, including claims from third-parties (gas suppliers & customers).

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3 Comments:

Anonymous Anonymous said...

They knew it all along the problems before the Government divested last December.
The minister denies any of that allegation.
Give me a break.

It is a typical Indonesian scam.

Floating conspiracy theory now extended in the public?
This exercise is one big shit to book building for financing 2009 election to who you know whom.

Sugiharto is a party man and he is the pointman to garner the fund.
Same old story like Laksamana Sukardi before eh?
Old song new singer.
If BAPEPAM is not involved they should suspend PGAS for few days to let the dust settle.
Otherwise this problem is more than PGAS, the JSX reputation is at stake.
My two cents,
St

January 14, 2007 4:12 AM  
Anonymous Anonymous said...

I had a suspicious toward this stock when the smart money kept selling from the top, months ahead of time. Being intelligent business peoples, they must have known that there were problems well before the news announcement. Smart money, I believe, also knows that PGAS is a company with a bright future. This company will not going out of business. So, let's see who is buying at these levels when everybody is selling. The smart money !!

DR

January 14, 2007 10:58 AM  
Anonymous cyber walker said...

I think the stock has been overvalued when it continued increasing last year. People in gas business knew it before. Assumed that market is rational, I would not suggest to buy this falling knife...

January 15, 2007 8:22 PM  

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