Foreign investors do not buy share driven by emotion, but more by rational calculation."Jakarta (ANTARA News) - Two state lenders Mandiri Bank and BRI Bank chose to wait and see before deciding on share buyback plan.
Earlier Minister for State Enterprises Rini Soemarno said 16 state companies would buy back their share from the market after the sharp fall in share prices.
BRI President Director Asmawi Syam said the bank would not be in a hurry to buy back shares.
"We are in a position of wait and see. The share prices today rebound before buy back was executed," Asmawi said here on Tuesday.
He said the countrys second largest bank in asset would continue to see the situation and study the market sentiment.
He said global condition has to be considered in planning buyback as most of the banks traded shares are held by foreign investors.
Meanwhile, Bank Mandiri President Director Budi Gunadi Sadikin said the market condition at present tends to be influenced by emotional issue rather than fundamental factor.
"Such a situation should be treated carefully. The share price fall is only temporary," he said.
That is why the buyback program of the government to prevent the share prices from sinking deeper was not executed, he said.
"The share prices should not be seen on daily basis. There is emotional issue there, and it is not necessary for us to react to emotional issue," he said.
He acknowledged that the shares of Bank Mandiri had been undervalued based on the price earning ratio or price to book value of banks in ASEAN in general.
However, he said, he was not worried by the price fall as the banks traded share are dominated by foreign investors.
"Foreign investors do not buy share driven by emotion, but more by rational calculation," he said.
BRI, Bank Mandiri and BNI are included in the list of 16 state companies encouraged to buy back shares from the market to prop up the market.
Rini said at least Rp10 trillion had been prepared for share buyback planned after a 3.97 percent fall of the composite share price index to a record law at 4,163.729 points.
On Tuesday, however, the index closed 64.77 points or 1.5 percent higher at 4,228.501 points.