Share prices plunge as profit taking sweeps the market

Share prices plunge as profit taking sweeps the market

JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
plunged on Tuesday in active trading, ending a week-long buying
spree.

Stockbrokers said most blue chip stocks fell sharply as
jittery investors took profits amid fears of escalating political
tension following the bomb blast at Istiqlal Mosque in Jakarta on
Monday.

The Composite Index, which breached the psychological 500
barrier on Monday, fell 4.3 percent to end the day at 485.97.

President B.J. Habibie and other political leaders condemned
the bombing and asked people to remain calm. However, newspaper
reports said a mob attacked a Christian school complex in South
Sulawesi.

A senior analyst at state-owned securities company PT
Danareksa, however, played down the role of the bombing in
Tuesday's stock market plunge.

Danareksa asset management director Joseph Ginting said the
fall was due to profit taking, which often takes place following
a large jump in share prices.

"Investors are tempted to quickly make a profit after the
index surges the previous day. I see that short-term buying on
the JSX has gained momentum during the country's political and
economic uncertainties," Joseph said.

He said foreign investors had renewed confidence in the local
stock market, leaving local investors behind.

"Recent buying on the JSX by foreign investors is a signal
that they are stealing the start," he said.

Joseph said the portion of shares bought by foreign investors
had returned to above 50 percent from the 40 percent level.

According to data, foreign investors' net buying as of March
31 had increased by 1.7 percent to US$1.52 billion compared to
last year, he said.

He attributed the more active foreign traders to the fact that
local traders failed to see the good fundamentals of the stock
market because of a lack of attention to the data.

Joseph said the 10 percent increase to Rp 170 trillion in
market capitalization in the first quarter of the year reflected
an improved sentiment about the market.

Other measures for the increase should also be taken into
account, including the smooth start of the bank restructuring
program, the operation of the bankruptcy law and the
implementation of the $2.4 billion Miyazawa Plan, as well as
additional loan commitments by other international financial
organizations, Joseph said.

Other Asian stock markets also paused for breath on Tuesday as
investors took profits after stretching a liquidity-driven
regional rally into the third week, dealers said.

In Tokyo, share prices bounced back as investors bought on
dips in late trading after the market slipped following a decline
on New York's technology-heavy Nasdaq index, brokers said.

The Nikkei average of 225 leading issues closed 22.90 points
higher, or 0.1 percent, at 16,697.11. But the Topix index of all
issues on the first section was still down 3.79 points at
1,328.90.

In Hong Kong, stocks closed down 2.8 percent on profit taking
following weakness on Wall Street and a key government land
auction.

The blue chip Hang Seng Index ended down 356.66 points at
12,409.78.

In Sydney, Australian share prices ended a five-day record-
breaking run, easing 0.7 percent in line with a weaker Wall
Street, brokers said.

The Australian Stock Exchange's benchmark All Ordinaries Index
slipped 23.0 points to 3,090.1.

In Kuala Lumpur, the composite index rose 6.11 points to
finish at 621.53, off an earlier low of 609.92.

In Bangkok, the Stock Exchange of Thailand (SET) main index
lost 6.08 points to close at 406.11 while the select SET-50 index
fell 0.54 points to 30.57.

In Manila, the Philippines Stock Exchange composite index
gained 2.67 points to close at 2,358.65.

In Seoul, the Korea Stock Exchange main index rose 3.84 points
to 770.43, off a high of 780.73 and a low of 759.81.

In Taipei, the Taiwan Stock Exchange weighted price index
edged up 4.56 points to 7,627.74.

In Shanghai, the Shanghai Stock Exchange's B-share index,
which tracks shares nominally reserved for foreigners, gained
0.14 points to close at 27.40. The A-share index of locally
traded stocks ended up 12.96 points, or 1.1 percent, closing at
1,246.88.

In Auckland, the NZSE-40 capital index closed down 20.77
points at 2,192.04.