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.
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