Rioting pressures local bourse<\/p>\n
JAKARTA (JP): Trading on the Jakarta Stock Exchange resumes
\nMonday after one week off, but analysts predict that share prices
\nwill be under heavy pressure this week following fresh outbreaks
\nof rioting in Ambon, Maluku, and various parts of the country.<\/p>\n
Securities analysts said fears of the rioting in Ambon
\nspreading to other areas in the province of Maluku would
\ndiscourage foreign investors from entering the battered local
\nmarket and likely force the remaining foreign fund managers here
\nto discharge their stock holdings.<\/p>\n
\"It is our security problems that will affect foreign investor
\nsentiment in the local market,\" the head of research at Panin
\nSekuritas, Anton Karlam, said on Saturday.<\/p>\n
Foreign fund managers, who have shunned the country's
\nfinancial market due to the unresolved economic and financial
\ncatastrophe, would not be tempted to reenter the local market
\nagain until they see some clear signs of recovery in all sectors
\nespecially on the economic and political fronts.<\/p>\n
\"I think the market will remain volatile in the short term due
\nto fresh riots at home,\" research director of BNI Securities
\nAdrian Rusmana said.<\/p>\n
News reports indicated that riot-torn Maluku was still tense
\non Saturday following bloody communal clashes which had caused a
\ndeath toll of at least 50 people.<\/p>\n
The rioting, which erupted early last week, had also left
\nscores of people injured and almost 100 homes and several
\nchurches and mosques torched, making it the worst single outbreak
\nof violence in the country since the May rioting in Jakarta last
\nyear which led the downfall of former president Soeharto.<\/p>\n
Adrian said offshore fund managers' perspectives on the
\ncountry's investment climate have totally changed to negative due
\nto the financial and political fiascoes.<\/p>\n
\"Indonesia is not the right investment spot at this point in
\ntime and all they want to do is to escape the country,\" Adrian
\nsaid.<\/p>\n
He said fears following the devaluation of Brazil's currency,
\nthe real, which had set off global financial woes, would still
\nincite massive selloffs in emerging markets, including the
\nbeleaguered local bourse.<\/p>\n
In addition, there are no fresh leads in the market which
\ncould encourage local retail investors to buy stocks.<\/p>\n
\"Market sentiment has not improved as there is no single
\npositive item of news to support it,\" BNI's Adrian said.<\/p>\n
An institutional sales broker with Trimegah Securindolestari,
\nVonny Juwono, said trading activities in the local market, which
\nhad dwindled prior to the long holiday, would be marked by
\npersistent selloffs by most investors due to the country's
\ncomplex problems.<\/p>\n
\"We do not expect too much as investors are still wary of our
\nmarket,\" she said.<\/p>\n
The Jakarta Stock Exchange Composite Index, the main gauge for
\nlocal share prices, fell 8.4 percent to 402.40 points in the week
\nprior to the week-long Ramadhan holiday.<\/p>\n
Daily average turnover stood at around 279.5 million shares
\nchanging hands, at an average daily transaction value of Rp
\n416.87 billion.<\/p>\n
Aside from the stock market, analysts also have a bleak
\noutlook on the rupiah, which dived to break the 9,000 level to
\nthe dollar on Friday.<\/p>\n
Currency dealers said the rupiah would not improve this week
\ndue to possible fresh attacks by offshore operators and renewed
\ndollar demand by local commercial banks.<\/p>\n
\"I think sentiment on the rupiah will still be bearish next
\nweek,\" a chief dealer with a joint venture bank said on Saturday.<\/p>\n
He said talk of a possible street rally by university students
\nand new political parties this week would cast shadows across the
\ncurrency.<\/p>\n
\"Some people will use those planned demonstrations as an
\nexcuse to speculate on the rupiah,\" the dealer noted. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rioting-pressures-local-bourse-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}