Combination of factors behind JSX's decline<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The Jakarta Stock Exchange's market capitalization -- the
\ntotal value of stocks traded in the bourse -- dropped this year
\nas transaction value declined due to a combination of the
\nprolonged sluggish domestic market and the global economic
\ndownturn.<\/p>\n
The Capital Market Supervisory Agency (Bapepam) said in its
\nyear-end report on Thursday that the exchange's market
\ncapitalization had dropped by 9.8 percent to Rp 231.75 trillion
\n(US$22.8 billion) as of Dec. 26 from 256.62 trillion at the end
\nof last year.<\/p>\n
Average transaction value as of Dec. 26 declined by 22.46
\npercent this year to Rp 397 billion from Rp 513 billion in 2000<\/p>\n
It also said that the July Jakarta Composite Index of 470.22
\npoints was the highest ever throughout the year following the
\nelection of Megawati Soekarnoputri who became the country's fifth
\npresident.<\/p>\n
However, the index was brought back to its lowest level of
\n367.67 points on Oct. 7 after the Sept. 11 attacks on the U.S.<\/p>\n
On Thursday, the composite index closed at 379.97 points, or
\nsome ten percent lower than the closing index the year before,
\nwhich stood at 416.32 points.<\/p>\n
The shaky performance of the world's economic superpowers --
\nJapan and the United States -- early in the year signaled a
\nglobal economic slowdown this year.<\/p>\n
The devastating Sept. 11 suicide attacks on the U.S. have
\naggravated the slowdown so that the world's economy is now
\nheading toward a full-blown recession.<\/p>\n
All these, according to agency chief Herwidayatmo, coupled
\nwith the country's economic doldrums, have been weighing heavily
\non the performance of the exchange.<\/p>\n
Foreign investors have been quitting the exchange,
\nHerwidayatmo said, citing that foreign investors made up only 10
\npercent of transactions in the capital market, as against 20
\npercent the year before.<\/p>\n
The drop in the participation of foreign investors is
\nregarded as the main reason behind the sharp decline in several
\nmarket indicators given the fact they have much larger capital
\nthan local players, who are mostly small-time investors.<\/p>\n
\"Our main program for next year is how to make the market more
\nexciting for domestic players with large capital. Once they come
\nin, foreign players are expected to follow suit,\" he said.<\/p>",
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