Share prices fail to sustain Monday's gains
<p>Share prices fail to sustain Monday's gains</p><p> JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
failed to sustain their impressive gains yesterday, losing about
3 percent due to profit takings and reports of sporadic riots.</p><p>Securities brokers said market sentiment remained bullish in
the morning but profit takings by short-term investors and
reports of riots in several towns in East Java and Sulawesi
killed the buying mood.</p><p>The JSX Composite Index, which posted a 1.3 percent gain in
the morning session, sank 17.31 points to close at 536.79.</p><p>The share prices, which gained 14 percent Monday, were very
volatile with many short-term investors taking a profit from the
previous day's gains, while others sold their stocks on fears
that reports of unrest would further worsen confidence in the
already weak economy, analysts said.</p><p>Riots erupted in several towns in Java and South Sulawesi
over the last few days, with shops and retailers bearing the
brunt of the mobs' fury, according to newspaper reports.</p><p>The economic crisis gripping Indonesia is leading to massive
layoffs and dramatic price increases, heightening social unrest
across the country. Most of the riots and other disturbances have
been confined to Central Java and East Java.</p><p>In the foreign exchange market, the rupiah stabilized at
9,500/10,200 against the U.S. dollar at the close following
repeated interventions by the central bank, currency dealers
said.</p><p>Stock analysts said recent gains in the stock market could
primarily be attributed to the influx of foreign funds into
emerging markets, including Indonesia.</p><p>"The market may seem to be bullish but people are still
cautious for the mid and long term," said Mohammad Syahrial, head
of research at Pentasena Securities.</p><p>The head of research at Socgen Crosby Securities, Goei Siauw
Hong, said the influx of foreign funds into Indonesia Monday was
driven by market confidence in the recent government economic
reforms to improve the country's economy.</p><p>He said, however, the newspaper reports on the riots prompted
selling activities, some due to fears that the riots would spread
and some because other investors deemed it was time to take a
profit.</p><p>Hong predicted serious unrest in Jakarta in the near period as
two million residents would soon return to the city after
spending their Idul Fitri holidays in their hometowns and
villages.</p><p>"More and more people will return to Jakarta to find no job to
come back to," he said.</p><p>"Things are getting worse for these people as prices of basic
commodities continue to rise," he added.</p><p>"The market long-term view is still bleak. The latest reforms
introduced by the government were solely aimed to improve the
country's economy in the long term, not in the short run," he
said.</p><p>An analyst who asked for anonymity said the market mid- and
long-term outlook remained gloomy due to uncertainty over the
March presidential election.</p><p>He said it was almost certain that Soeharto would remain the
country's president but if he chose a wrong man as vice
president, it would trigger more problems in the country's
politics and economy. (aly)</p><p> Currencies -- Page 9</p>
failed to sustain their impressive gains yesterday, losing about
3 percent due to profit takings and reports of sporadic riots.</p><p>Securities brokers said market sentiment remained bullish in
the morning but profit takings by short-term investors and
reports of riots in several towns in East Java and Sulawesi
killed the buying mood.</p><p>The JSX Composite Index, which posted a 1.3 percent gain in
the morning session, sank 17.31 points to close at 536.79.</p><p>The share prices, which gained 14 percent Monday, were very
volatile with many short-term investors taking a profit from the
previous day's gains, while others sold their stocks on fears
that reports of unrest would further worsen confidence in the
already weak economy, analysts said.</p><p>Riots erupted in several towns in Java and South Sulawesi
over the last few days, with shops and retailers bearing the
brunt of the mobs' fury, according to newspaper reports.</p><p>The economic crisis gripping Indonesia is leading to massive
layoffs and dramatic price increases, heightening social unrest
across the country. Most of the riots and other disturbances have
been confined to Central Java and East Java.</p><p>In the foreign exchange market, the rupiah stabilized at
9,500/10,200 against the U.S. dollar at the close following
repeated interventions by the central bank, currency dealers
said.</p><p>Stock analysts said recent gains in the stock market could
primarily be attributed to the influx of foreign funds into
emerging markets, including Indonesia.</p><p>"The market may seem to be bullish but people are still
cautious for the mid and long term," said Mohammad Syahrial, head
of research at Pentasena Securities.</p><p>The head of research at Socgen Crosby Securities, Goei Siauw
Hong, said the influx of foreign funds into Indonesia Monday was
driven by market confidence in the recent government economic
reforms to improve the country's economy.</p><p>He said, however, the newspaper reports on the riots prompted
selling activities, some due to fears that the riots would spread
and some because other investors deemed it was time to take a
profit.</p><p>Hong predicted serious unrest in Jakarta in the near period as
two million residents would soon return to the city after
spending their Idul Fitri holidays in their hometowns and
villages.</p><p>"More and more people will return to Jakarta to find no job to
come back to," he said.</p><p>"Things are getting worse for these people as prices of basic
commodities continue to rise," he added.</p><p>"The market long-term view is still bleak. The latest reforms
introduced by the government were solely aimed to improve the
country's economy in the long term, not in the short run," he
said.</p><p>An analyst who asked for anonymity said the market mid- and
long-term outlook remained gloomy due to uncertainty over the
March presidential election.</p><p>He said it was almost certain that Soeharto would remain the
country's president but if he chose a wrong man as vice
president, it would trigger more problems in the country's
politics and economy. (aly)</p><p> Currencies -- Page 9</p>