Stocks tumble to an historic five-year low<\/p>\n
JAKARTA (JP): Local stock prices tumbled to a five-year low
\nyesterday, but the rupiah continued to muster strength to break
\nthe 11,000 resistance level against the U.S. dollar.<\/p>\n
Stockbrokers and analysts said both foreign and local
\ninvestors dumped shares following the government's backtracking
\nin its privatization plan and the looming financial calamity in
\nRussia.<\/p>\n
\"Investors are just selling blind, getting rid of whatever
\nthey still hold,\" Clifford Ma, a fund manager at Samuel Asset
\nManagement in Jakarta, told Bloomberg News.<\/p>\n
Stock prices on the Jakarta Stock Exchange (JSX) dropped 4.5
\npercent, with the main price index falling 15.92 points to close
\nat 339.02, a level not recorded since 1993.<\/p>\n
Over the week, the index lost 12.7 percent.<\/p>\n
Mashill Jaya Securities' stock analyst Johanes Salim said
\nRussia's crisis would slow down the recovery in other crisis-
\nridden countries, including Indonesia.<\/p>\n
Vickers Ballas Tamara Securities' research head Noraya
\nSoewarno added that domestic factors, especially the backsliding
\nin the privatization plan, were responsible for the market
\nplunge.<\/p>\n
\"Investors who have been upbeat about state enterprises are
\nnow disappointed and, as a result, they are dumping stocks of
\nstate firms,\" she told The Jakarta Post.<\/p>\n
The government announced recently that it would divest only 14
\npercent of its stake in cementmaker Semen Gresik, instead of the
\n35 percent announced previously, due to a public outcry from
\nlocals near its West Sumatra plant.<\/p>\n
Noraya added that lingering worries over the country's
\npolitical and social situation were another discouraging factor
\nfor many investors in considering long-term investments.<\/p>\n
\"Taking a long-term investment position in the country's
\nequity market is too risky as uncertainty remains high,\" she
\nsaid.<\/p>\n
The rupiah, unhindered by the turmoil in the stock market,
\ncontinued to gain ground against the U.S. dollar yesterday,
\npassing 11,000 to touch an intra-day high of 10,900.<\/p>\n
Its close of 11,075 to the dollar was slightly firmer than
\nThursday's 11,150.<\/p>\n
Currency dealers attributed the strengthening rupiah to
\nlimited dollar selling by state banks and the absence of negative
\nnews at home.<\/p>\n
However, the rupiah opened weaker at 11,200\/11,300 in London
\nmarket.<\/p>\n
Dealers said the rupiah standing was supported by news that
\nthe International Monetary Fund would soon disburse another US$1
\nbillion loan for Indonesia.<\/p>\n
Indonesia also expects disbursement of $8 billion of loans
\nduring the period until March 1999 from members of the
\nConsultative Group on Indonesia.<\/p>\n
\"That expected huge supply of official loans will further
\nboost the rupiah,\" said a dealer with a local private bank.<\/p>\n
He added that the high domestic bank interest rates were also
\nresponsible for the improving rupiah.<\/p>\n
The rates were attracting money out of stocks into high-
\nyielding Bank Indonesia riskless promissory notes.<\/p>\n
On the JSX, losers led gainers by 72 to 16, with 72 stocks
\nunchanged and 128 others untraded.<\/p>\n
Those in negative territory were led by state domestic
\ntelephone provider PT Telkom, the largest stock on the exchange,
\nwhich fell Rp 300, or 12 percent, to close at Rp 2,200 on 8.4
\nmillion shares traded.<\/p>\n
State international telephone company PT Indosat, which fell
\nRp 575 to Rp 7,400. Giant cigarettemaker PT Gudang Garam fell Rp
\n200 to Rp 7,925 and competitor PT HM Sampoerna lost Rp 150 to Rp
\n2,125. (aly)<\/p>",
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