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.