Local stock market briefly breaches the 600 point barrier
Local stock market briefly breaches the 600 point barrier
JAKARTA (JP): The main local stock price index breached the
psychological 600 point barrier in morning trade -- the first
time since late 1997 -- but lost momentum in afternoon trade
following sales of second and third liner stocks, brokers said.
Because of the late sell-off, the Jakarta Stock Exchange (JSX)
Composite Index ended the day trading a meager half point higher
to close at 594.053 points.
A local stockbroker said there was extensive buying early in
the day by state-owned brokerage houses, creating suspicions that
the government was behind the action.
"The government might have been active in the market early in
the day, but was quieter later to focus on the weaker rupiah," he
said.
The rupiah closed lower at 8,140 against the U.S. dollar in
the spot market on Thursday, compared to 8,040 the previous day.
The broker attributed the weaker rupiah to the further
reduction of the benchmark interest rate level this week.
State-owned Danareksa's retail distribution director Joseph
Ginting said there was no such intervention from the government,
but he could understand traders' suspicions.
"It is just a coincidence that foreign investors bought
through state-owned security houses. These foreign investors
wanted to invest in Telkom and Indosat through private placement
and still wanted to increase their shareholding," he said.
Joseph said some investors lost in the bidding for Telkom's
private placement, so they went to the market.
Joseph added that state-owned security houses, including
Danareksa, handled the private placement of the state-owned
enterprises.
"This is the reason why they bought through state-owned
security houses."
He said the index could not be sustained over the 600 level on
Thursday after facing sustained selling pressure of second and
third liner stocks.
"I think these second and third liner stocks are deemed more
volatile in the current condition, where the campaign period
still has two weeks to go."
Investors do not usually take a long-term view on the second
and third liner stocks, according to Joseph.
Rizal Prasetyo, an analyst at Jardine Fleming Nusantara, said
investors were taking advantage of a downward interest rate
curve. Low interest rates activated equity trading.
"Indonesia is the only country in Asia whose interest rate has
not fallen back to the pre-crisis level of mid-1997. We are left
behind, but we're going there."
Most large-cap stocks closed mixed on Thursday, with market
leader Telkom down Rp 300 to close at Rp 4,000.
But auto giant Astra International increased Rp 525 to Rp
2,575 clearly as a result of its recently announced debt-
restructuring plan.
Two big cigarette stocks also made substantial gains. PT
Gudang Garam shares were up Rp 850 to Rp 17,650, while HM
Sampoerna increased Rp 375 to Rp 13,475. Food maker Indofood rose
Rp 500 to Rp 8,750 on its solid first quarter performance.
Meanwhile, AFP reported that Asian stock markets closed mixed
Thursday despite more signs of an improvement in regional
economies.
In Hong Kong, the key Hang Seng index lost 27.72 points to
close at 12,375.42.
In Tokyo, the key Nikkei index of 225 leading issues on the
Tokyo Stock Exchange closed 71.81 points higher at 16,199.99.
In Singapore, the benchmark Straits Times Index shed its gains
to end 15.39 points higher to 1,926.89, off its high of 1,944.30.
In Kuala Lumpur, the composite index ended 3.89 points higher
to close at 779.62 points.
In Sydney, the Australian Stock Exchange's benchmark All
Ordinaries index slipped 28.6 points to close at 2,952.6.
In Bangkok, the benchmark Stock Exchange of Thailand (SET)
index slipped 3.9 points to 479.6 while the SET 50 fell 0.36 to
36.1 points.
In Manila, the Philippine Stock Exchange composite index shed
21.62 points to 2,369.20.
In Seoul, the Korea Stock Exchange main index fell 26.38
points at 708.60, off a low of 704.60 and a high of 735.14.
In Taipei, the Taiwan Stock Exchange weighted price index
slipped 5.72 points to 7,608.88.
In Shanghai, B-share index, which tracks shares nominally
reserved for foreigners, gained 0.10 points to 29.59.
In Auckland, the NZSE-40 capital index fell 35.55 points at
2,135.14 at the close. (udi)