Stocks fall 5.81% on profit taking<\/p>\n
JAKARTA (JP): The main Jakarta Stock Exchange (JSX) index fell
\n5.81 percent yesterday due to a combination of mounting fears
\nover sporadic riots and profit taking on several blue chip
\nstocks.<\/p>\n
The JSX Composite Index plunged sharply lower by 30.09 points
\nto 487.61 from the previous day's close of 517.70 with a total
\nturnover of around 1.18 billion shares changing hand on the
\nregular market valued at Rp 1.03 trillion (US$143.05 million).<\/p>\n
One broker with a local securities house said the market was
\ndragged down by losses in most big shares, particularly dollar-
\nsensitive counters like PT Telkom, PT Indosat and PT Tambang
\nTimah.<\/p>\n
Others said that several protests staged over escalating
\nprices of basic commodities had prompted most investors to take
\nprofits yesterday.<\/p>\n
"Fears that the riot will spread to other cities really comes
\nas bad news for the market. There was still some local buying in
\nthe morning session before the protest commenced but after the
\nlunch break people started to take profits," a broker said.<\/p>\n
"Most investors took profits on the banking stocks on early
\ngains they made the previous day," another said.<\/p>\n
However, the head of research of Vickers Balls Tamara, Noraya
\nSoewarno said the stocks of several listed state-owned companies
\nand privately run companies with dollar earnings still offered
\npromising prospects for long-term investors.<\/p>\n
"Most foreign investors prefer to invest in such stocks
\nbecause they are not influenced so severely by impact of the
\nmonetary crisis," she said.<\/p>\n
Attractive firms<\/p>\n
Noraya said these companies included Indosat, PT Semen Gresik,
\nTambang Timah, PT Aneka Tambang, PT Gudang Garam, PT INCO, PT
\nDaya Guna Samudera and Indah Kiat Pulp and Paper.<\/p>\n
"They have strong fundamentals which in turn attract foreign
\ninvestors to buy their stocks."<\/p>\n
She said the prices of these stocks had increased by between
\n20 percent and 254 percent since the monetary crisis hit
\nIndonesia in July last year.<\/p>\n
The rupiah has lost around 74 percent of its value against the
\nAmerican dollar since then while the JSX Composite Index has
\nfallen more than 30 percent since early July to 487.61 over the
\nsame period.<\/p>\n
"Even so, the stock prices of these companies have increased
\ndramatically over the same period. This means that foreign
\ninvestors are still interested in the future prospects of these
\ncompanies," she said.<\/p>\n
The stock price of Indosat rose by 57 percent to close at Rp
\n12.500 on Feb 10 from Rp 7,475 on July 1, 1997, Semen Gresik by
\n27 percent to Rp 6,525 from Rp 5,525, Tambang Timah by 218
\npercent to Rp 10,400 from Rp 3,825, Aneka Tambang by 29 percent
\nto Rp 1,800 from Rp 1,400, Gudang Garam by Rp 38 percent to Rp
\n13,850 from Rp 10,050, International Nickel Company (INCO) by 254
\npercent to 10,800 from Rp 3,050, Daya Guna Samudera by 54 percent
\nto Rp 7,400 from Rp 4,800 and Indah kiat pulp and Paper by 20
\npercent to Rp 1,650 from Rp 1,375 over the same period.<\/p>\n
"At the same time prices of stocks in other sectors had
\ndescended even below their par value,' she said adding that other
\nlisted companies had gone technically bankrupt because their
\ntotal liabilities were higher than their current assets.<\/p>\n
Noraya said that most investors were still waiting to see how
\nthe government would implement the reform package agreed upon
\nwith the International Monetary Fund in exchange for a US$43
\nbillion-sponsored package for Indonesia.<\/p>\n
"If the government sticks to its reform commitment, the
\nportfolio investment here will be quite promising," Noraya said.
\nShe added however that sporadic riots occurring in several small
\ntowns due to escalating prices of basic essentials over the past
\nfew weeks would cast a shadow over trading activities. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/stocks-fall-581-on-profit-taking-1447893297",
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