Sampoerna triggers a 1.97% share price plunge on the JSX
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)