JSX index plunges on heavy sales

JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) plunged on heavy selling of bank stocks, with the Composite Index losing 12.62 points to close at 669.99.

Large selling of Bank Negara Indonesia and Bank Internasional Indonesia dampened the market's mood.

Turnover was 210.6 million shares worth 411.7 billion rupiah.

BNI was down Rp 100 at Rp 1,350 rupiah, BII lost Rp 125 to Rp 1,650, BDNI was unchanged at Rp 2,400, Lippo Bank was down Rp 125 at Rp 2,525 and Bank Niaga was down Rp 200 rupiah at Rp 7,200.

Sampoerna fell Rp 425 to Rp 11,575 amid negative reaction to Putera Sampoerna's buying a stake in Indofood, while Gudang Garam fell 175 rupiah to 10,200 rupiah.

Indofood was unchanged at Rp 5,775 while Indocement rose 25 rupiah to 3,400 rupiah.

Securities analysts said most bank stocks lost ground as investors reacted negatively to newspaper reports that the central bank would limit banks' credits to a maximum of 18 percent this year.

"It is an over-reaction because every body knows the central bank's credit target is between 17 and 18 percent a per annum," one analyst said.

But another analyst said investors were concerned not only because of the central bank's low credit target but also because of its stricter control in monitoring loans.

Banks should report their annual lending projections to the central bank before the start of each calender year. The central bank will then ask the banks to revise their lending targets down if it feels they are too high

Indofood booked a significant gain in early trade before easing on profit taking.

Newspaper reports that Putera Sampoerna had bought around six percent stake in Indofood pushed up the company's share price.

Putera, the chairman of cigarette maker H.M. Sampoerna bought a significant amount of auto maker Astra's shares last year. (hen)