Jakarta shares weaken again, but rupiah extends gains

Jakarta shares weaken again, but rupiah extends gains

The Jakarta Post, Jakarta

The Jakarta stock market weakened on Monday after displaying a
surprisingly quick recovery from last week's bombing incident in
the capital city, but the rupiah extended its gains.

The main Jakarta Composite Index ended down 0.1 percent at
504.84 as investors took profit on some blue chips and second
liners which posted hefty gains during last week's two-day rally.

Decliners led gainers 74 to 61, with 80 stocks unchanged.
Volume was 933 million shares valued at Rp 317 billion (US$38.19
million).

The index fell by 3.1 percent when the bomb exploded at the
JW Marriott Hotel in Jakarta on Tuesday, but it quickly recovered
on Wednesday and Thursday, although it started to weaken again on
Friday.

Traders said that the absence of positive news at home sent
many investors to the sidelines as they carefully monitored the
country's situation and progress in the investigation of the
bombing incident. Gains in many regional markets such as Tokyo
and Hong Kong failed to cheer up investors in Jakarta.

Shares in state-owned telecommunications firm PT Telkom fell
1.2 percent to Rp 4,200 on further profit-taking. Telkom, which
gained a total of 7.2 percent during the two-day rally, also fell
by 4 percent on Friday. Telkom is the largest counter on the
Jakarta Stock Exchange.

Shares in the giant Bank Mandiri rebounded from a low of Rp
750 to end the session unchanged at Rp 775. PT Indosat
(telecommunications firm) was down Rp 50 at Rp 8,000. Cigarette
maker Gudang Garam was flat at Rp 9,150 while rival Sampoerna was
up Rp 25 at Rp 4,100. Carmaker Astra International was unchanged
at Rp 3,825.

Local investors were also seen selling shares in smaller
companies which gained during the previous rally.

But dealers said that gains in certain bank stocks and second-
liners helped limit the market's losses.

One trader said that plans by the government to press ahead
with the sale of its 52 percent stake in the publicly listed Bank
Lippo had triggered a rally in some banking shares.

Bank Lippo was up Rp 55 at Rp 540, Bank Internasional
Indonesia (BII) was up Rp 10 at Rp 100, Panin Bank was up Rp 5 at
Rp 290, Bank Bali was up Rp 5 at Rp 40.

The government hopes to complete the divestment program in
October. The Indonesian Bank Restructuring Agency will soon
launch an overseas trip to market the shares.

Meanwhile in the currency market, the rupiah continued to
strengthen on Monday as investors were apparently encouraged by
the lack of incidents over the weekend.

Traders said that positive statements from government
officials that the impact of the bombing incident on the economy
would be minimal heartened the market.

The rupiah closed at Rp 8,540 per U.S. dollar compared to Rp
8,565 on Friday.

"Trading was calm as the market found little incentive to
speculate," a dealer at a foreign bank was quoted by Dow Jones as
saying, noting that most orders stemmed from genuine customer
demand rather than speculative trading.

But the local unit remained below Rp 8,490, where it was
before the Aug. 5 suicide bombing, that killed at least 11 people
and injured nearly 150.

This shows that although confidence was building, the market
was not yet comfortable until all the culprits behind the
Marriott attack have been arrested, dealers said.

The police so far have not named any suspects linked to the
attack, except the driver/suicide bomber who died.