JSX share prices continue losing ground
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) dropped for the third consecutive day yesterday, with the composite index falling 2.5 points to close at 675.436.
Securities analysts said Bank Indonesia's move to cut the interest rates of its promissory notes failed to boost market confidence.
Several popular shares gained ground in the morning, pushing up the price index before the close of the first trading session, analysts said.
"But the selling pressure hit the market again in the afternoon when foreign investors made a significant sale order," one dealer said.
Total turnover was 350.93 million shares changing hand on the regular market valued at Rp 604.84 billion (US$233.52 million) yesterday.
Decliners led advancers by 70 to 47 with 69 stocks remaining unchanged.
Yesterday's fall was the third in the last three days. On Thursday, the index lost 3.13 percent after falling 1.9 percent the previous day on a sharp increase in the interest rates of the central bank's Bank Indonesia's Certificates (SBIs).
Bank Indonesia has raised the interest rate of its SBIs by several percentage points in the last three weeks to stabilize the rupiah.
The rise led to a drastic increase in the interbank loans rates, which subsequently caused an increase in deposit rates.
"I think investors remain uncertain about the direction of interest rates. That's why there is still panic selling," Rizal Prasetyo, Jardine Fleming Nusantara's vice president told The Jakarta Post.
Dealers said Minister of Finance Mar'ie Muhammad's surprise visit to the exchange Thursday to calm down investors did not help much.
"The visit has calmed investors but it has not lifted market sentiment yet," a dealer with Asian Development Securities said.
But vice president of Mashil Jaya Securities Tjandra Kartika attributed market decline not only to interest rates but also to the new regulations on margin trading, to the summer holiday of most foreign fund managers and the payments for the new rights issues over the next three weeks.
He said investors should at least spend about Rp 7 trillion ($2.70 billion) in rights issue payments over the next four weeks.
"They have to sell their shares to generate funds for the payment of rights shares of other companies," he said.
Most blue chips lost yesterday with Bank Internasional Indonesia closing Rp 25 to Rp 1,575. Bank Negara Indonesia rose by 75 to Rp 1,425, Bank Dagang Negara Indonesia (BDNI) down by Rp 25 to Rp 1,100 and Lippo Bank down Rp 50 to Rp 2,575.
Indosat slipped Rp 175 rupiah to Rp 7,425 while Telkom was unchanged at 3,850 rupiah.
Dealers said that cement stocks were the main target for selling by investors with Semen Gresik falling by Rp 225 to Rp 3,800, while Semen Cibinong by Rp 50 to Rp 3,500 and Indocement by Rp 125 to Rp 3,875. (aly)