Cabinet lineup casts shadow on stock trading<\/p>\n
JAKARTA (JP): The announcement of the much-awaited cabinet
\nlineup by President Soeharto on the weekend will cast a shadow on
\nlocal stock trading this week, stock analysts said.<\/p>\n
Many analysts said the new cabinet lineup would be too weak to
\ncope with the country's worst ever crisis and that the
\nappointments would discourage trading activities.<\/p>\n
Tjandra Kartika, head of research at Mashill Jaya Securities
\nacknowledged that the announcement of the new cabinet ended all
\nthe speculation about Soeharto's economic team, which had partly
\ncaused lethargic trading last week.<\/p>\n
\"But, unfortunately, the President came up with not so
\npromising a team,\" another analyst said.<\/p>\n
President Soeharto announced on the weekend the list of new
\ncabinet ministers for 1998\/2003, which includes tax director
\ngeneral Fuad Bawazier as finance minister and timber tycoon
\nMohammad \"Bob\" Hasan as the minister of industry and trade.<\/p>\n
Managing director of Harita Securities, Christina Lim, also
\nshared Tjandra's view, saying that the new economic team would
\nsend a negative signal to the already weak trading activities,
\nwhich last week saw daily trading volume drop below 500 millions
\nshares.<\/p>\n
Tjandra said that the economic team would be too weak to face
\nthe country's battered economy.<\/p>\n
He said most of the new ministers were mostly appointed due to
\ntheir loyalty to the President rather than because of their
\ncapabilities.<\/p>\n
\"I think loyalty is the key criteria in the ministerial posts
\nthis period, ignoring such important qualifications as being
\nclean and professional,\" he said.<\/p>\n
Most stockbrokers and analysts expected the new cabinet,
\ndespite its shortcomings, to come out with clear-cut measures to
\ndeal with the crisis soon, he said.<\/p>\n
They said they should leave their inward-outlook ideas and
\nadopt a market-oriented policy if they wanted to meet the
\nmarket's expectation.<\/p>\n
\"The new cabinet should announce immediately what measures are
\nto be taken to stabilize the ailing rupiah,\" Tjandra said.<\/p>\n
The rupiah has lost in value around 70 percent to the U.S.
\ndollar since the crisis first hit the country in early July. The
\ncurrency closed at 10,400 against the greenback from the
\nprecrisis level of 2,450<\/p>\n
\"If the President announces the measure during his first
\ncabinet meeting Monday, then the rupiah will gain ground,\" Lim
\nsaid.<\/p>\n
The most possible measure, according to Lim, is the
\nintroduction of a special rupiah rate for imports of medicine and
\nseveral essential commodities of at between 5,000 and 5,500 per
\ndollar.<\/p>\n
The JSX Composite index closed 5.50 points or 1.1 percent
\nlower to 506.73 points last week from 512.23 the previous week.<\/p>\n
Total average daily turnover declined 28 percent to 415.83
\nmillion shares changing hands on the regular market last week
\nfrom 569.14 million the previous week.<\/p>\n
Total average daily value dropped by 19 percent to just Rp
\n552.97 billion (US$53.61 million) last week from Rp 684.88
\nbillion the previous week.<\/p>\n
Most blue chip stocks gained last week with state-run
\ntelecommunications Telkom rising by Rp 200 to Rp 4,225 and
\ncigarettemaker Gudang Garam by Rp 200 to Rp 10,775, while
\ncompetitor Sampoerna rose by Rp 75 to Rp 5,800, and satellite
\noperator Indosat remained unchanged at Rp 14,400. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cabinet-lineup-casts-shadow-on-stock-trading-1447893297",
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"sponsor": "Okusi Associates",
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