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tate-owned telecommunication operator PT Telekomunikasi Indonesia (TLKM) booked significant gains on two consecutive days amid the bearish market condition following the company'€™s share split.

Telkom gained another 3.49 percent on Thursday to close at Rp 2,225 following a 6.17 percent increase the previous day, the first day it traded its stock at a new price.

Analysts said the share split not only led to a boon for shareholders but also for the weakened market given the company'€™s large contribution to the market'€™s capitalization.

Telkom conducted a stock split to improve the liquidity and affordability of the company'€™s shares. Under the 1-5 stock split, existing shareholders received five new shares for every share they held. The move, thereby, reduced the price of the shares from Rp 10,125 (93 US cents) to Rp 2,025.

Telkom finance director Honesti Basyir said the stock split improved the affordability of the shares. '€œPreviously priced at about Rp 10,000, our shares were deemed expensive by investors,'€ he pointed out.

He added that by enhancing the affordability, and hence the liquidity of the company'€™s shares, local investors could trade shares more frequently.

Telkom secured permission for the stock split at a shareholders meeting in April.

However, Telkom CEO Arief Yahya recently said the company would conduct the stock split once the market exhibited bullish signs.

'€œThe right timing will guarantee good market reception of our stock split,'€ he noted.

The Jakarta Composite Index (JCI) dived to 3,967.84 on Tuesday, the first time it had slid below 4,000 since July 12 last year. The index rebounded on Wednesday, the day Telkom debuted its shares at the new split stock price, by closing at 4,026.48. On Thursday, the index closed higher at 4,103.59.

Universal Broker analyst Satrio Utomo said Telkom'€™s stock split was not only beneficial for the operator but also for the market index as a whole.

'€œTelkom has the fifth largest market capitalization, and hence, even a one point upward movement of its shares could impact the index average,'€ he said.

Satrio added that the government was keen on seeing the index rise to ease the fears of investors, who have been pulling their funds out of the market.

'€œThe improved affordability of Telkom'€™s shares would encourage investors to buy the shares, and hence, conduct trading,'€ he noted.

He further said that the affordable price would ease the buying back of shares, if Telkom decided to do so.

The State-Owned Enterprises Ministry has encouraged listed state-owned companies to buy back shares to bolster the sluggish market.

Telkom previously said it possessed about Rp 10 trillion in cash, but has not elaborated on buy back plans.

Through an announcement, the operator set Aug. 30 as the final date to close share transactions based on previous prices and the listing of shareholders entitled to the results of the stock split.

It also set Sept. 2 as the final date for closing transactions of shares carrying the new stock split prices.