Telkom Indonesia Shares Jump 8% on Wall Street, Offering Relief After a Steep Year-Long Slide for the ADR

NEW YORK — U.S.-listed shares of Telkom Indonesia rose 8% on Tuesday, offering a rare bright spot for investors in the Indonesian telecommunications giant after a steep decline over the past year.

The company's American depositary shares, which trade on the New York Stock Exchange under the ticker TLK, gained 84 cents, or 8%, to $11.27 in early trading. Volume reached about 1.9 million shares, well above the stock's average.

It was not immediately clear what drove the gain. Telkom Indonesia's ADRs remain down about 47% over the past 52 weeks.

About Telkom Indonesia

PT Telkom Indonesia (Persero) Tbk, known as Telkom, is Indonesia's largest integrated telecommunications company. It is majority-owned by the Indonesian government.

The company provides fixed-line telephone, broadband internet, mobile services through its stake in Telkomsel, data center and enterprise services, and digital businesses. It serves one of the largest populations in Southeast Asia, with more than 270 million people.

Each TLK American depositary share represents 100 of the company's Series B shares traded in Jakarta.

A difficult year

Telkom's U.S.-listed shares have fallen sharply over the past year amid concerns about competition in Indonesia's telecom market, pressure on mobile revenue and broader weakness in emerging market stocks.

Analysts have at times turned cautious on the stock, raising concerns about valuation and the company's near-term growth.

The company's second-quarter results showed signs of improvement, with a rebound in profitability helped by stronger mobile data pricing and disciplined spending. Telkom has also pursued restructuring efforts aimed at improving the performance of its businesses.

Low valuation

After its decline, Telkom trades at a relatively low valuation, with a price-to-earnings ratio of about 10.5. Some investors see the stock as attractive at current levels, while others remain wary of competition and economic conditions in Indonesia.

Emerging market stocks, including Indonesian shares, can be sensitive to changes in global interest rates, currency movements and investor risk appetite.

Telkom is expected to report third-quarter results in late October. Investors will watch for trends in mobile and broadband revenue, profitability and any updates on restructuring plans.