Mining Stocks Plunge, IHSG Closes Down 2.86%
The Composite Stock Price Index (IHSG) of the Indonesia Stock Exchange (BEI) closed weaker by 204.9 points or 2.86% at 6,969.40 on the closing of trading on Friday.
Analyst from MNC Sekuritas, Herditya Wicaksana, stated that the IHSG correction aligns with the weakening of the majority of global stock exchanges amid external sentiment and pressure on mining-based stocks.
“This is in line with the majority of global and regional Asian stock exchanges that corrected, caused by the US-Iran negotiations that have not yet found a middle ground, and if you look at the rupiah exchange rate against the US dollar, it has weakened again,” he said in Jakarta on Friday.
Herditya explained that technically, the IHSG still has the potential to continue weakening.
In addition to global factors, the biggest pressure also came from mining-based issuers following the emergence of a proposal to increase royalties on minerals and coal (minerba) by the government to increase state revenues.
The government through the Ministry of Energy and Mineral Resources (ESDM) proposed a new progressive royalty scheme for several major mineral commodities.
“This scheme includes an increase in the upper limit of royalties as well as adjustments to the price range to optimise state revenues when commodity prices rise,” said Herditya.
In the proposal, the copper concentrate royalty was revised from the previous flat 7-10% to 9-13%, while the copper cathode royalty increased from 4-7% to 7-10%.
The gold royalty was also proposed to increase from 7-16% to 14-20%, accompanied by an additional new price range up to above 5,000 US dollars per ounce.
Meanwhile, the silver royalty changed from a flat 5% to progressive 5-8%, while the tin royalty increased from 3-10% to progressive 5-20%.
For nickel ore, the royalty rate remains in the range of 14-19%, but the price interval is adjusted lower so that the rate increase could occur more quickly.
This sentiment was reflected in the plunge of the commodity basic materials sector or IDXBASIC by 7.80%, followed by the energy sector or IDXENERGY which fell 4.59%, and the transportation sector or IDXTRANS which weakened 5.72%.
Throughout the trading session, there were 138 stocks that strengthened, 607 stocks that weakened, and 214 stagnant stocks. The BEI market capitalisation was recorded at Rp12,405 trillion.
Trading activity recorded 54.39 billion shares changing hands through 2.8 million transactions, while the transaction value reached Rp36.07 trillion.