Local share prices fall to 17 month low<\/p>\n
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
\nplunged seven percent on Monday as trading reopened after last
\nweek's bomb blast at the bourse.<\/p>\n
Securities dealers said that share prices dived across the
\nboard amid uncertainty over the country's security situation,
\npushing down the JSX Composite Index to a 17-month low at 411.03
\n-- a seven percent drop on Wednesday's close.<\/p>\n
The rupiah, however, closed slightly higher at Rp 8,655
\nagainst the U.S. dollar as compared to Rp 8,685 on Friday despite
\nthe drastic fall on the stock market.<\/p>\n
Coordinating Minister for the Economy Rizal Ramli said the
\nplunge was only temporary. "We're optimistic that stock trading
\nwill revive soon," Rizal said after witnessing the resumption of
\ntrading.<\/p>\n
Minister of Finance Prijadi Praptosuhardjo and Minister of
\nIndustry and Trade Luhut Pandjaitan were also present at the
\nstart of trading at a heavily guarded JSX building.<\/p>\n
Trading was stopped on Wednesday when a bomb exploded in the
\nbourse's parking lot, killing at least 11 people.<\/p>\n
Rizal said that the government would soon privatize state
\nenterprises and sell their assets under the Indonesian Bank
\nRestructuring Agency (IBRA) to help boost the market.<\/p>\n
"We need to introduce new shares that attract investors,"
\nRizal said, adding that he had asked IBRA chief and Junior
\nMinister for the Restructuring of the National Economy Cacuk
\nSudarijanto to start selling IBRA's assets.<\/p>\n
Securities dealers said that selling pressure took place
\nthroughout almost the whole morning session, pushing down prices
\nof most blue chip shares.<\/p>\n
"Local investors panicked, foreign investors also panicked,
\neveryone let go of their shares," a dealer at a local brokerage
\ncompany said.<\/p>\n
Trading recovered slightly in the afternoon and some stocks
\nmanaged to gain ground, but overall market sentiment remained
\nweek, dealers said.<\/p>\n
Jasso Winarto, a senior analyst at PT Sigma Research, said
\nalthough the drop was felt by almost all companies, the index
\nfell largely because foreign investors sold their blue chip
\nstakes.<\/p>\n
"Merrill Lynch sold Rp 60 billion worth of blue chip stocks,
\nCredit Lyonnais sold Rp 38 billion and SG 49 billion," he told
\nThe Jakarta Post.<\/p>\n
He said foreign investors' selling could continue until next
\nweek. By then, Jasso said, the market index might reach 375.<\/p>\n
"The word is that they (foreign investors) will keep selling
\nuntil they reach $67 million," Jasso said, quoting market rumors.<\/p>\n
He said that too much bad news hit Monday trading.<\/p>\n
The sudden replacement of National Police chief Lt. Gen.
\nRusdihardjo by President Abdurrahman Wahid also affected the
\nmarket. Investors considered it interference in the law, rather
\nthan an act of pressure to resolve the bombing, Jasso said.<\/p>\n
U.S. Defense Secretary William Cohen's statement that
\nIndonesia risked international isolation if it failed to disarm
\nTimorese militias was another blow, he added.<\/p>\n
Cohen was in Jakarta for a one-day visit.<\/p>\n
The U.S. and the United Nations have demanded Indonesia disarm
\nTimorese militias, after they allegedly killed three UN aid
\nworkers in Atambua, West Timor.<\/p>\n
"What investors fear most from the Atambua incident is
\ninternational isolation," Jasso said.<\/p>\n
Stock analyst Budi Ruseno H.P. of PT Bhakti Investama also
\nattributed panic selling for the year's record low performance at
\nthe JSX.<\/p>\n
But he added that external factors had also played their part,
\nin particular investors' anticipation of the U.S. Federal Reserve
\nraising its interest rates. (bkm)<\/p>",
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