Profit-taking spree pulls down local share prices 7.7 percent<\/p>\n
JAKARTA (JP): Share prices in the local stock market tumbled
\n7.7 percent on Wednesday as massive profit-taking hit most blue
\nchip stocks, dealers said.<\/p>\n
The dealers said that besides profit taking, many investors
\nalso sold shares to follow the downward trend in regional
\nmarkets.<\/p>\n
\"I think the buying spree is over. Investors have started to
\ncarefully review their asset allocations here,\" Edhi Widjojo, an
\nanalyst with Mashill Jaya Securities said.<\/p>\n
Stockbrokers also attributed the sharp decline in stock prices
\nto a combination of political and social instability at home and
\na switch to other attractive emerging markets by foreign fund
\nmanagers.<\/p>\n
\"But on top that, there is no reason for share prices to
\ncontinue their winning streak given the country's dire economic
\nand political situation,\" another analyst said.<\/p>\n
The local stock market had shown signs of a recovery in the
\nlast few days after foreign investors reentered the fray.<\/p>\n
The Jakarta Stock Exchange (JSX) main price gauge fell 7.7
\npercent (32.69 points), falling back past the key 400-point level
\nto 387.38 on a turnover of 632.5 million shares worth Rp 400
\nbillion.<\/p>\n
Losers led gainers by 143 to 8 with shares in 43 companies
\nremaining unchanged.<\/p>\n
Vonny Juwono, an institutional sales broker with Trimegah
\nSecurindolestari said that some foreign investors had still shown
\nan interest in the local market, despite the fall in stock
\nprices.<\/p>\n
\"Some foreign brokerage firms still placed more buying orders
\nthan selling orders,\" she said, pointing out that Credit Lyonnais
\nCapital Indonesia, ING Barings Securities, Vickers Ballas Tamara
\nand Danareksa Securities were all net buyers on the day.<\/p>\n
She also said that other foreign brokerage firms including ABN
\nAmro and Merrill Lynch Indonesia had made huge buying orders over
\nthe past few days, despite continued student demonstrations.<\/p>\n
News reports said that around 1,500 students took to the
\nstreets on Wednesday to press on with their demands that former
\nPresident Soeharto be brought to court to face charges of
\ncorruption and human rights abuse during his 32-years in power.<\/p>\n
Vonny said that unlike in previous weeks where stock prices
\nhad been largely unaffected by demonstrations, protests in the
\ncoming days would be likely to dampen market sentiment.<\/p>\n
\"Foreign investors remain concerned about the country's
\npolitical situation,\" Edhi said.<\/p>\n
Unlike stock prices, the rupiah closed firmer against the U.S.
\ndollar at 7,475 on Wednesday, compared to Tuesday's close of
\n7,600. The rise came on the back of limited central bank
\nintervention and a strong Japanese yen, currency dealers said.<\/p>\n
Dealers said the rupiah remained almost unchanged after very
\nthin trading on Wednesday because most market participants were
\nreluctant to build new positions.<\/p>\n
\"Most people wanted to square their positions and will now
\ntake a wait and see attitude,\" a chief dealer with a local
\nprivate bank said.<\/p>\n
Bank Indonesia Governor Sjahril Sabirin said on Wednesday that
\nthe rupiah still had the potential to advance to the 6,500 level
\nagainst the American dollar in the coming days because the rate
\nof inflation had shown further signs of slowing down. (aly)<\/p>",
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