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.