Sampoerna triggers a 1.97% share price plunge on the JSX
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) plunged 1.97 percent yesterday due to strong selling pressures by foreign investors on index movers, particularly on HM Sampoerna, dealers said.
Several dealers and analysts contacted by The Jakarta Post said that to some extent, the weakness in the regional markets was responsible for the drop. They, however, shared the view that the market mood was psychologically affected more by negative sentiment toward HM Sampoerna rather than by regional weakness.
"There is nothing wrong with our market. So, I would say that it was the sharp drop of Sampoerna's share price which has pulled down other stocks," a senior manager with a local brokerage told the Post.
He said that it might be true that the heavy correction showed that the market was just in tune with the weakness in the regional markets and Wall Street.
"But it should not have been enough to cause such a big drop today," he contended.
"So, I would also say that there should be a technical rebound in the next few days," he added.
The JSX composite index dropped 11 points to close at 574.78 points. Total trading volume reached 104 million shares worth Rp 229 billion (US$97.6 million).
Decliners outnumbered gainers 73 to 45, while 56 counters unchanged.
Sampoerna further lost 11 percent yesterday to close at Rp 18,725, following a 6 percent drop the previous day. Total turnover was estimated at 2.2 million shares.
"It seems to me that foreign investors could not see any positive impact of the acquisition of Astra shares by HM Sampoerna and its founder Putera Sampoerna," a senior dealer with PT Pentasena Arthasentosa, A. Sumirat, said
Sumirat observed that what happened yesterday was normal because foreign investors did not like the uncertainty about Sampoerna's motive.
Meanwhile, the research director of PT Sigma Batara, Fajar L. Sutardi told the Post that foreign investors might have sensed unfair practices on Sampoerna's part.
"Investors may speculate that Sampoerna have used a portion of the US$400 loan facility it obtained recently to back up the transactions," Fajar said.
The suspicion was based on an assumption that Sampoerna presently does not need any fresh funds, meaning that the loan could become idle funds if it is not reinvested.
Fajar said that investors might also view Sampoerna's move to invest in a completely new business as poor diversification.
Technically, according to Fajar, investors should have also questioned why the company was investing in an automotive firm through a cigarette company it were able to directly buy Astra shares.
"So, in my opinion, what happened with Sampoerna is not just an overreaction," he added.
Other big caps stocks which decreased yesterday included Gudang Garam, Telkom, Astra and Semen Cibinong.
Meanwhile, Astra's chief commissioner, A.R. Ramly, stated yesterday that Astra's management was uninformed about the parties involved in the transactions of Astra shares on the JSX.
Astra's management, according to Ramly, did not even know that Putera Sampoerna was the largest buyer of Astra shares before Capital Market Supervisory Agency announced that Putera and HM Sampoerna already owned a 12.6 percent stake in Astra.
He also declined to explain the details of the share transactions by saying: "If you need more information, you'd better ask the parties who can be categorized as Astra shareholders."
"One thing is for sure, Astra as the country's largest carmaker will concentrate on its business with the main objective to become a company which is able to compete both at home and internationally," Ramly told journalists after the launching of Toyota's new product here yesterday. (alo)