Jakarta shares end lower on weak global sentiment

Jakarta shares end lower on weak global sentiment

Rendi A. Witular and Dadan Wijaksana, The Jakarta Post, Jakarta

More profit-taking on selected blue chips brought the Jakarta
Composite Index down on Monday as global market sentiment was hit
by concern over the economic impact of the Madrid bombings.

The share index dropped 14.001 points, or 1.9 percent, to
close at 724.15, the lowest in two months, with
telecommunications firm Telkom leading the fall in blue chips.
Telkom dropped Rp 500, or 6.7 percent, to Rp 6,700, accompanied
by Indosat, which lost its value by Rp 350, or 2.1 percent, to
close at Rp 16,650.

Monday's decline follows an earlier declining trend, which saw
the Jakarta stock index drop by 4.5 percent since last Wednesday,
the day before election campaigning started.

On Wednesday, the index closed at 760.32 points.

Political campaigns for the legislative election are taking
place from March 11 to April 1. The election will be held on
April 5, when more than 147 million voters will choose the new
members of the House of Representatives.

However, BNI stock analyst Fendi Susiyanto told The Jakarta
Post that the negative sentiment had been caused by the bomb
attacks on Spain and its impact on the global economy, rather
than by ongoing political campaigning.

"The election is no longer the primary factor. The drop was
more because of panic-selling of blue chips by foreign investors,
following claims by al-Qaeda that it was responsible for the
attacks," Fendi said.

Unless the campaigns turned violent, he added, the political
event would provide little concern in the stock market.

A powerful blast rocked Spain's capital city during the rush
hour on Thursday, with official casualties reaching 200 I think
it is now 201, so "just over 200" is better.

On the currency market, the rupiah, benefiting from the
relatively peaceful progress of the campaigns thus far, closed
slightly stronger on Monday against the U.S. dollar.

The local unit ended at 8,638 per dollar, as against 8,650 on
Friday, as fears regarding possible violence during the campaign
have started to subside.

Late last week, foreign market players allegedly bought the
dollar on concern that campaigning could turn violent.

Turning to the stock market, Fendi said the index could drop
further toward the 700 level, especially if nothing fresh boosted
the market in the near future.

However, he said, the downfall would be temporary, as the
index could bounce back in the longer term on favorable
macroeconomic conditions, including a further fall in Bank
Indonesia benchmark interest rate or good performance posted by
the country's top shares.

This was quite apart from the fact that shares in Indonesian
companies were still considered "cheap" as compared to those of
companies of the same caliber in neighboring countries.

In Monday's trading, decliners led gainers 72 to 34 while 79
others were unchanged, with the volume traded reaching 1.14
billion shares at a total value of Rp 669 billion.

The country's top cigarette producers, Gudang Garam and
Sampoerna, experienced mixed trading. While Gudang Garam fell by
Rp 300 to Rp 12,000, rival Sampoerna gained Rp 50 to Rp 4,650.

Bank Mandiri, the largest lender in the country, fell 1.8
percent or Rp 25 to Rp 1,357, while Astra International, the
nation's largest car maker, was also down Rp 50 at Rp 5,300.