IHSG slips to 6,094.94, weighed down by basic materials and energy stocks

Jakarta (ANTARA) - The Indonesia Stock Exchange’s Composite Index (IHSG) closed weaker on Thursday afternoon, pressured by shares in the basic materials (raw materials) and energy sectors. The IHSG closed down 223.56 points or 3.54 percent at 6,094.94. Meanwhile the LQ45 index, comprising 45 leading shares, fell 14.28 points or 2.26 percent to 616.40.

The main sentiment behind the IHSG’s weakness came from the plan to centralise commodity exports by export-oriented state-owned enterprises, which is thought to harm companies and shareholders, Fixed Income and Macro Strategist at PT Mega Capital Indonesia, Lionel Priyadi, said when contacted in Jakarta on Thursday.

Market participants, domestic and foreign, responded to plans to issue Government Regulation (PP) on the Governance of Exports of Natural Resource Commodities (SDA), including rules designating state-owned enterprises as sole exporters for several strategic commodities.

Market participants also reacted to the formation of PT Danantara Sumberdaya Indonesia (DSI) as a dedicated export state-owned enterprise for the natural resources sector.

PT DSI sits directly under the Danantara Investment Management Agency (BPI Danantara), with the main task of strengthening the governance of exports of several strategic commodities, such as palm oil (CPO), coal, and ferro alloys.

One of the reasons for creating the dedicated export state-owned enterprise is the alleged under-invoicing of commodity exports, which is claimed to have cost the state up to Rp15,400 trillion over 34 years.

At the open, the IHSG weakened and stayed in negative territory through the first trading session. In the second session, the IHSG remained in the red zone until the close of trading.

According to the IDX-IC Sectoral Index, all eleven sectors declined, with the basic materials sector down the most at 6.96 percent, followed by the energy sector and the non-prime consumer goods sector, down 6.74 percent and 5.70 percent respectively.

Gainers included SOTS, BOBA, ENAK, APLI, and KOBX. The biggest losers were BUKK, IRSX, ENRG, POLU, and RAJA.

Trading activity reached 2,145,783 trades, with 35.77 billion shares changing hands worth Rp18.49 trillion. A total of 88 issues rose, 663 fell and 69 were flat.

Regional Asian stock markets this morning included the Nikkei up 1,853.59 points (3.10%) at 61,658.00; the Shanghai Composite down 84.91 points (2.04%) at 4,007.28; the Hang Seng down 264.60 points (1.03%) at 25,386.52; and the Strait Times up 0.80 points (0.02%) at 5,045.71.