Share prices down 1.43% at JSX on profit taking

JAKARTA (JP): Profit taking by both foreign and local investors pushed share prices down 1.43 percent on the Jakarta Stock Exchange (JSX) yesterday.

"I'm not so sure what the main reason for today's drop is. Technically, I would say that the drop is due to foreign profit taking but I cannot say that there is a strong foreign selling pressure because there is also foreign buying," a senior dealer of PT Panin Securities, who asked not to be named, told The Jakarta Post.

The JSX composite index fell 8.04 points to close at 554.79 points yesterday. Losers led gainers by 63 to 33, while 41 counters remained unchanged.

Total trading volume reached 132 million shares worth Rp 285.13 billion (US$121.48 million).

"There was a strong signal of profit taking in the Monday afternoon session when the prices of stocks which had already increased seven points in the morning declined to close only one point higher than the previous trading day," said Deny Riady from PT Asian Development Securities.

"People might have assumed that this week was the right time for making profit. And my best guess is those investors only shifted their portfolios from one stock to another," the dealer from Panin said, adding that "big deals were done among foreign brokers."

The dealer added that several foreign brokerage firms like ING Baring and WI Carr were net sellers, while Credit Lyonnais, Jardine Fleming and SBC Warburg were net buyers.

U.S. brokerage firm Merrill Lynch also made large buy transactions yesterday, for Indosat shares also.

"Indonesia is definitely one of the risky markets in the Far East, from which people are trying to leave, looking at better growth areas in Latin America or Eastern Europe," a dealer with a London-based brokerage was quoted by AFX Asia as saying.

Telecommunications operators Telkom and Indosat declined by Rp 100 and Rp 150, respectively, to close at Rp 3,325 and Rp 7,525.

Diversified conglomerate Bimantara, which is controlled by President Soerharto's second son Bambang Trihatmodjo, fell Rp 100 to Rp 2,300, while toll road developer Citra Marga declined by Rp 50 to Rp 1,550.

Cigarette maker HM Sampoerna lost Rp 175 to close at Rp 24,100, while Gudang Garam declined by Rp 275 to Rp 8,800.

Other big shares suffering losses were Semen Gresik (which dropped by Rp 75 to Rp 5,725), Indocement (by Rp 125 to Rp 6,800), Semen Cibinong (by Rp 50 to Rp 3,950), BII (by Rp 125 to Rp 5,700) and Indah Kiat (by Rp 50 to Rp 2,225).

Meanwhile, the JSX yesterday suspended share trading in PT Gajah Surya Multi Finance, of the Gajah Tunggal Group, only 30 minutes before the market closed.

The JSX's management said in a statement that the suspension was done because Gajah Surya's share prices rose sharply, by more than 30 percent, from Rp 1,150 to a high of Rp 1,500 before the suspension.

Gajah Surya was also recorded as the most active stock with 22.89 million shares changing hands.

"The temporary suspension will be lifted when the company's management discloses the significant issues which boosted the share price," a JSX director, Mas Achmad Daniri, was quoted by the statement as saying.

Several brokers contacted by the Post said that last week's rumors about Gajah Surya failed to push up its share price.

"But it seems to me that investors positively accepted those rumors today," one of the brokers said.

He said there was a widespread rumor that BDNI, a listed bank of the Gajah Tunggal group, might have made a proposal to acquire Gajah Surya.

Investors also speculated that Gajah Surya is currently preparing a rights issue.

Another rumor said that Gajah Surya is preparing to change its status from a multi-finance company into the holding company of the group's financial services.

A dealer said the rumors about Gajah Surya also boosted related stocks like BDNI, Gajah Tunggal and Andayani Megah.

BDNI rose by Rp 75 percent to Rp 1,900 with a trading volume of 5.3 million shares.

Tire maker Gajah Tunggal rose Rp 50 to Rp 1,250 with a trading volume of 7.3 million shares while Andayani Megah rose Rp 125 to Rp 1,375, with 6.4 million shares changing hands. (alo)