JSX stocks strengthen but concerns remain
JSX stocks strengthen but concerns remain
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
gained slightly yesterday but concerns over the country's
political and economic uncertainty remained, analysts and dealers
said.
The rupiah, which opened at 11,400/11,500, managed to close at
11,200 against the U.S. dollar. But it is still lower than the
previous day's close of 10,400.
Money market dealers said the rupiah weakened to as low as
11,800 against the U.S. dollar in the morning spooked by another
serious blow to the country's already highly fragile banking
system before recovering to 11,200 in the spot market.
Media reports that Bank Central Asia (BCA) -- 70 percent owned
by Salim Group and the remaining 30 percent by Soeharto's
children -- had been put under the supervision of the Indonesian
Banking Restructuring Agency (IBRA) continued to weigh down the
currency market.
"The inclusion of the BCA under IBRA shows that Indonesia's
banking system is still delicate," a dealer with a local private
bank said.
A run on the Salim Group-owned bank by worried depositors over
past weeks has brought its liquidity below acceptable levels.
But dealers expected that the US$43 billion bailout package,
brokered by the International Monetary Fund (IMF) to bring the
country out of the economic crisis, would boost the rupiah's
value and enable it to break the psychological level of 10,000
against the greenback in the days ahead.
"The fate of the rupiah depends largely on the IMF loan
package now," the dealer said.
The IMF director for Asia-Pacific, Hubert Neiss, will leave
Jakarta today (Saturday) after a whirlwind fact-finding mission
designed to assess when the IMF can turn on the financial
assistance taps again.
"Investors will remain sidelined until IMF releases its funds
for the country," the dealer said.
As the rupiah strengthened, the stock prices on the JSX gained
footing with the main price index rising 1.5 percent or 6.24
points to 420.24 yesterday.
Total turnover was 313.35 million shares changing hands on the
regular market with a total value of Rp 355.48 billion (US$32.31
million).
Brokers attributed the increase in the main price index to the
arbitrage trading by foreign fund managers on cross-listed stocks
like PT Telekomunikasi Indonesia (Telkom), satellite operator PT
Indosat and tin mining firm PT Tambang Timah.
The stock prices of Telkom rose Rp 150 to Rp 3,750 on a total
6.48 million shares, Indosat rose Rp 450 to Rp 14,950 on 784,000
million shares and Tambang Timah closed unchanged at Rp 7,000 on
153,000 shares.
"This is understandable as the three stocks account for 35
percent of market capitalization in the local bourse," the broker
said, adding that any slight movement in the stocks would
determined the main price index.
A stock broker with Trimegah Securindolestari said that
foreign investors continued to discard the stocks related to
Soeharto's family and his allies like cementmaker PT Indocement
Tunggal Perkasa and noodlemaker PT Indofood Sukses Makmur.
The broker said that most foreign brokerage houses, which were
seen to make large selling orders on the stock, were SBC Warburg
Securities, Credit Lyonnnais Securities, Merril Lynch Securities,
Indosuez WICarr Securities and Jardine Fleming Securities.
"Investors do not want to hold the stocks for fear that they
will not have value again," the broker said.
The stock price of Indofood fell Rp 100 to Rp 1,575 on a total
turnover of 15.81 million shares and cement maker Indocement
Tunggal Perkasa shed Rp 200 to Rp 2,700 on 71,500 shares.
Head of research of Pentasena Securities Mohammad Syharial
said that despite the increase in the main price index, foreign
investors would continue to stay away from the country's battered
economy until President Habibie endorsed concrete economic and
political measures to bring the country out of its predicament.
"Foreign investors will continue to stay away from the
country's dire market until they see concrete measures introduced
by the government," he said. (aly)