JSX drops 3.7% as fuel, tariff hikes hurt market

JSX drops 3.7% as fuel, tariff hikes hurt market

Dow Jones, Jakarta

Indonesian shares ended lower Thursday on a government decision to raise fuel prices and electricity and telecommunication tariffs, as well as profit-taking after recent gains, dealers said.

The Jakarta Stock Exchange Composite Index ended down 3.7 percent, or 15.820 points, at 409.125, below the crucial support of 410.

Decliners led gainers 91 to 16, with 31 stocks unchanged.

Volume was thin at 203 million shares valued at Rp 217 billion (US$24 million).

Dealers also said investors took profit following the main index's gains of around 8 percent over the last few sessions of 2002 on year-end window-dressing.

Wednesday, the government announced hikes in telecommunication and electricity tariffs by an average 15 percent and 6 percent, respectively. Fuel prices were also raised by between 3 percent and 23 percent.

"The price and tariff increase was a good excuse to take profit," said a trader with a local brokerage firm.

Analysts said the increases in tariffs and prices will hurt the revenue of many companies in Indonesia this year.

There are also fears that such increases will lead to demonstrations, they added.

Consumer and cement blue chips led the market's fall.

Cement producer Semen Gresik lost 6.6 percent, or Rp 550, to Rp 7,600. Gresik's rival Indocement fell 7.4 percent, or Rp 50, to Rp 625.

Cigarette maker HM Sampoerna lost 6.8 percent, or Rp 250, to Rp 3,450, as players took profit following its recent 21 percent rise fueled by year-end window-dressing. Sampoerna's rival, Gudang Garam, declined 4.8 percent, or Rp 400, to Rp 7,900.

Bellwether Telekomunikasi Indonesia was another decliner, slipping 3.3 percent, or Rp 125, to Rp 3,725, despite the higher telecommunication tariffs. Dealers said investors had already priced in the hike and took profit after the news was announced.

Indonesian Satellite was down 4.9 percent, or Rp 450, at Rp 8,800, hurt by continued concerns that its workers would stage another protest against the government's recent sale of a 41.94 percent stake in Indosat to Singapore's ST Telemedia.

Further profit-taking also hit shares in car maker Astra International, which fell 7.1 percent, or Rp 225, to Rp 2,925 after surging 45 percent recently.

The rupiah ended higher against the dollar in volatile trading thanks to alleged intervention by the nation's central bank, dealers said.

The dollar closed at Rp 8,915, down from its close Monday at Rp 8,960. Trading was closed Tuesday and Wednesday for the New Year holiday.

Dealers said Bank Indonesia was suspected of intervening in the market when the dollar rose to an intraday high of Rp 8,995 on the back of demand from local companies.

Bank Indonesia's alleged intervention discouraged market participants from pushing the dollar higher and some even liquidated their dollar-long positions.

Bank Indonesia has said in the past that it would intervene to help the rupiah if it's necessary. But, it won't comment on specific intervention.

Dealers added that the market couldn't find a compelling reason to push the dollar higher after the Christmas and New year celebrations passed without incident.

Many western countries had issued warnings about the threat of church bombings targeting foreigners during Christmas.

Dealers expect Bank Indonesia to continue to intervene Friday to drive the U.S. unit below Rp 8,900. They expect the dollar to trade between Rp 8,875 and Rp 8,925 during the last trading session of the week.