First Pacific shares surged 9.67 per cent yesterday on news that the Indonesian Bank Restructuring Agency (Ibra) had sold a 2 per cent stake in the Hong Kong conglomerate. The sale reduces Ibra's stake in First Pacific to less than 1 per cent, almost clearing an overhang that has acted as a drag on the stock for months, according to analysts. The disposal comes about six weeks after the Indonesian government agency sold 6.1 per cent of First Pacific for HK$404.7 million. Ibra acquired its stake in First Pacific from substantial shareholder Salim Group to cover debts owed by the group's troubled Indonesian banking arm, Bank Central Asia. The agency yesterday sold 58 million First Pacific shares at $2.28 a share, a discount of 1.93 per cent to Friday's closing price of $2.325, raising $132.24 million, a source said. The sale was brokered by ING Barings on behalf of Holdiko Perkasa, the holding firm for the Salim assets pledged to Ibra. The buyer was a United States institutional investor. First Pacific shares yesterday rose 22.5 cents to $2.55. Analysts welcomed the disposal, saying it was further good news for the company on top of the planned sale of its controlling stake in FPB Bank Holding. 'The overhang has gone once and for all, finally,' said Lehman Brothers analyst Philip Tulk. The company's fundamentals were at least improving, if not very good, he said. 'For value investors First Pacific represents a great opportunity right now.' Another analyst said: 'It is always good news when you dispose of any overhang.' After two years of restructuring, the firm had few non-core assets to dispose of and was well-positioned for the future, he said. 'It's all coming together for them. It's very positive that they are going to sell the bank and I think things are turning around for them,' he said. Celestial Securities research head Herbert Lau Chung-kwan said: 'It still looks a bit undervalued. Its value should be about $3.20. The majority of its holdings are publicly listed companies - you can calculate it by their prices.' First Pacific reported a 55 per cent slump in first-half net profit to $393.1 million.