Bearish mood haunts Jakarta Stock Exchange
Bearish mood haunts Jakarta Stock Exchange
JAKARTA (JP): The government's controversial ruling on the car industry is believed to be the prime cause behind massive selling pressure in the Jakarta Stock Exchange last week.
As traders and investors are recovering from the impact, analysts are divided over where the market is heading this week.
Some believe the bearish sentiments will continue as more foreign funds would exit from the market, but one analyst hopes to see a rebound.
Last week, some of the big cap stocks came under pressures, triggered by a further decline in Astra shares, which closed 11 percent lower at Rp 2,700 (US$1.16).
The week saw foreign investors dumping Rp 870.2 billion worth of shares and buying Rp 852.7 billion.
The Jakarta Composite Index dropped 3.5 percent to 568.09 on Friday, 21 points below the week's opening of 592. Turnover reached 415.16 million shares worth Rp 1.2 trillion.
"I'm not so sure what was going on. But I do know that some foreign fund managers had been ordered to reduce their portfolio in Indonesia," Ikeda, a director of PT Asian Development Securities, Ikeda, told The Jakarta Post.
Ikeda said the automotive regulation issued two weeks ago resulted in a sharp drop on Astra's price. "Other sectors were affected by Astra's poor performance. I think the negative sentiment on Astra was what triggered the market correction."
Vice chairman of the Jakarta Brokers Club, Dan Dossi Matram, told the Post that the automotive regulation was the main reason behind the bearish sentiment.
Foreign investors, according to Dan Dossi, were perturbed by the regulation. "They need time to see how the regulation becomes effective. Most of them pulled their funds out because they were uncertain about the future," he said.
A director of PT Arga Artha Sekuritas, Nurkhamid Akhmad, said weaknesses in other markets in the region contributed to last week's bearish sentiments.
The escalating tension between China and Taiwan forced most fund managers to protect their portfolio, he said.
"Logically, cash outflow from China and Taiwan should have come to other Asian countries. Unfortunately, just like in the Gulf War in 1990, fund managers chose to secure their position rather than moving their funds to other markets," he said.
Nurkhamid said the 13-point drop in the JSX index on Friday was the biggest fall in 15 months.
"Therefore, the market should technically rebound next week because investors may try to take position," he said on Saturday.
Counters which saw active trading include Astra with 30.3 million shares, Sona Topas with 27.3 million, Gajah Tunggal with 20.5 million, Telkom with 17.6 million, Bank PDFCI with 15.44 million, Barito Pacific with 15.1 million, SMART Corporation with 15.1 million, Indah Kiat with 12.88 million, Lippo Land with 12.1 million and Anwar Siread with 11.2 million
Astra led in trading value, with Rp 109.7 billion, followed by HM Sampoerna, Telkom, Lippo Life, Indocement, Indofood, Semen Gresik, Lippo Land, Barito Pacific and Gudang Garam.
PT Nipress, was among the best performers with investors notching a 47 percent gain following rumors of a take over.
Other counters on the rise were Sona Topas (47.3 percent), Centris Multi Persada (34.6 percent), Super Indah (29 percent), Ades Alfindo (21 percent), Sumalindo (21 percent) and Lippo Land Development (18 percent).
Duta Pertiwi lost 17 percent following the company's announcement to issue bonds. Other top losers were Indomulti, Duta Pertiwi, Bayu Buana, Panin Bank, Ometraco, Jembo Cable, Astra International, Gajah Tunggal, Trias Sentosa and IMI Asiana. (08)