Jakarta market plunges over bearish sentiment
Jakarta market plunges over bearish sentiment
JAKARTA (JP): Rupiah started the week weaker yesterday in line
with the falling yen and the bearish domestic sentiment, and the
local bourse followed suit.
Currency dealers said the trading volume of the rupiah-dollar
was thin, which they attributed to Singapore's closure due to its
national day holiday.
The rupiah closed at 12,950/13,050 against the dollar on the
Jakarta spot market, weaker than its Friday close of 12,750.
"The rupiah weakened as the Japanese yen also weakened. It's
always that way," a dealer with a local private bank said.
The yen broke the 146 level to the dollar in Asian trading.
Dealers said the weak yen sent ripples through the rest of the
region.
In addition, dealers said the domestic situation was not
improving, either on political or economic fronts. The market
remains worried that more social unrest may occur ahead of the
country's independence day on Aug. 17.
Dealers said Bank Indonesia, the central bank, which was
spotted intervening in the market late last week, did not make
its presence felt yesterday.
State banks did offer the dollar at the 13,000 level, albeit
in a very small amount, they said.
"If the central bank or state banks intervene when the market
size is very thin like now, it would help the rupiah a lot," the
dealer said.
He noted that slight intervention by the central bank through
state banks last week had helped the rupiah strengthen to 12,700.
Share prices
The weaker rupiah coupled with an uncertain domestic political
situation caused share prices on the Jakarta Stock Exchange (JSX)
to close sharply lower for the ninth consecutive day yesterday.
The JSX composite index closed down 2.446 points at 421.167.
Volume stood at a meager 150.22 million shares valued at Rp
153.46 billion.
Losers outnumbered gainers 85 to 29, with 85 stocks unchanged
and 90 others untraded.
Trimegah Securindo Lestari's research head David Chang said
many local investors who had dominated trading for some time
lodged selling orders due to concerns over possible riots before
Aug. 17.
"Many local investors are quite worried about the rumors going
around about social unrest," Chang said.
"Today is worse because people spread unfounded rumors that
Gen. Wiranto (the Armed Forces commander) was shot. I myself
don't believe it, but many people thought it was true."
In addition, Chang said, some investors were switching their
investments in the equities market into the riskless Bank
Indonesia promissory notes (SBI) offering high interest rates.
Bank Indonesia offers a one-month SBI rate at 58 percent per
annum. But one-month SBIs sold through auction last week offered
an average rate of 68.33 percent per annum.
"Interest rates have increased again. This is bad for the
stock market," Chang said.
Most large-cap stocks were down yesterday, except heavyweight
state-owned telecommunications firm PT Telkom which gained Rp 125
to close at Rp 3,725 on 1.1 million shares traded.
International telephone service operator PT Indosat fell Rp
225 to Rp 10,875 on 341,500 shares traded. Cigarettemaker PT HM
Sampoerna lost Rp 200 to Rp 2,800 on 4.2 million shares, and
competitor PT Gudang Garam slid Rp 125 to Ro 7,875 on 1.1 million
shares.
The market yesterday saw the trading suspension of
multifinance firm PT Putra Surya Multidana as its stock prices
touched bottom at Rp 25 per share.
Dealers and analysts see the market outlook for the rest of
the week to stay bearish due to the potential downward pressure
from the domestic political situation. (rid)