Local market turnover sinks ahead of Chinese New Year

JAKARTA (JP): Trading volume on the local financial market plummeted on Monday to less than half the usual turnover as major players took a rest for the Chinese New Year holiday.

Analysts said share turnover dropped to Rp 60 billion from between Rp 150 billion and Rp 200 billion on regular days, while foreign exchange transactions fell to less than US$50 million from about $100 million.

Currency dealers said the absence of offshore operators caused trading volume to drain sharply.

Dealers said the rupiah benefited from the extremely light trading to firm slightly to 8,575 against the U.S. dollar, even as share prices fell nearly 1 percent.

The rupiah, which opened at 8,650/8.700, continued to gain ground on Monday as Bank Indonesia, the central bank, sold limited dollar amounts to take advantage of the absence of offshore operators.

Markets in Kuala Lumpur, Shanghai, Taipei and Seoul were closed on Monday and there was half-day trading in Hong Kong and Singapore in observation of the Lunar New Year on Feb. 16.

The rupiah, which traded in the 8,575 to 8,700 range, closed 1.4 percent stronger at 8,757 on Monday compared to 8,700 last Friday.

Currency dealers said the rupiah could further advance to as high as 8,500 against the dollar if the central bank continued its dollar purchases.

The Jakarta Stock Exchange (JSX) Composite price index fell 3.63 points to 396.92 on total turnover of 122.67 million shares valued at Rp 64.84 billion.

Decliners outdistanced advancers 44 to 15, with 90 stocks unchanged.

Stockbrokers confirmed trading activities were quiet because of the closure of several regional equity markets on Monday.

"Trading activities were dull, with some local traders going home earlier than usual," a broker with a local securities firm said.

Vonny Juwono, an institutional sales broker with Trimegah Securindolestari, said many of the foreign brokerage firms operating in the local market did not make significant transactions on Monday.

Jardine Fleming Nusantara and Merrill Lynch Indonesia were the only brokerage firms which placed orders of more than Rp 10 billion.

"The market is pretty quite," she said.

Stock analysts said they anticipated a slowdown in the market this week because the absence of foreign investors would likely weigh stock prices down further.

However, the head of research of Vickers Ballas Tamara, Ferry Yosia Hartoyo, said investors should remain focused on state- owned firms and companies with defensive balance sheets.

"Stocks of plantation, fishery, mining, pulp and paper and telecommunication sectors are still worth considering," he said in a daily market review on Monday.

Telecommunications firm PT Telkom fell Rp 50 to Rp 2,875 on 2.87 million shares traded and international call operator PT Indosat slid Rp 325 to Rp 11,625 on 268,500 shares changing hands. (aly)