JAKARTA, OCT 30, Reuter - Indonesian stockbrokers are jittery about a huge 335 million dollar share issue by a money-losing firm, saying it could make or break Jakarta's tiny market.

PT Indocement Tunggal Prakarsa drew attention when finance minister Johannes Sumarlin waived an exchange rule requiring two years of profit before a listing is permitted.

Burdend by massive debt payments, Indocement has accumulated losses of 227.6 billion rupiah.

Brokers say the issue, set at 23 times projected earnings for 1990, is overpriced.

One analyts said the issue had been about 30 times projected earnings, but analysts told lead underwriter Danareksa they thought it would be hard to sell. Two weeks later profit projections were revised upwards.

"I'm afraid you have to be a bit cynical," he added.

Indocement said its original forecasts were based on projected demand and the new figures on potential demand.

At 10,000 rupiah a share the nearly 600 billion rupiah issue will raise the value of Jakarta's market by 22 pct.

Some 336 billion of the issue will go to pay off domestic loans.

The 129.4 billion rupiah in overseas debts will stay on the books, together with 52.4 billion in foreign exchange losses. Current shareholders will earn 142 billion rupiah from the float. They include the government, which put 330 million dollars into the firm in 1985, and President Suharto's long-time business associate Liem Sioe Liong.

Some brokers believe the debt repayment will put the company back on its feet.

"Cement is a healthy business in Indonesia and certainly Indocement has a lock on the market," one said. The firm has nearly half of installed capacity and a 35 pct market share.

"Our past performance doesn't fit with current regulations it's true but we are selling the future, not the past," Indocement executive director Judiono Tosin told Reuters.

Indocement should be listed on the over the counter market where no profit record is needed, but the company believes size of the sale would swamp the OTC.

Indocement's strong political ties mean the issue is likely to get fully subscribed, but brokers fear the high price will discourage retail investors, leaving the field to Indonesian institutions, including state-owned investment trust manager Danareksa, which is also the lead underwriter.

"You don't add so much to the capitalisation of a market that is as small and immature as Jakarta without doing it a lot of damage. This issue will kill the market stone dead for the next six months," said Gavin Graham of Hong Kong based Thornton Management Ltd's Jakarta Fund.

But another analysts said the market would only die if the issue was a flop.

"It may suck up all the liquidity, but it will be the making of the market over the next three years," he said.

But if the issue fails, the government would hesitate to encouraging other large listings, he added.

The clamour for Jakarta shares has so exceeded supply that investors are used to seeing prices double in first-day trade.

But 800 million dollars in shares from 17 firms will hit the market in the next six weeks and by law 540 million of that must go to locals. Quick profits will be a thing of the past.

"It will kill off the speculative frenzies we have been seeing and stop people thinking they have a right to a 100 pct premium on every issue," Graham said. But the issue may smooth out some of the wrinkles common to emerging markets.

"As the market develops it will start to behave like any other," said Simon Dobson, fund manager at GT Management.