Soeharto-linked shares remain under pressure
JAKARTA (JP): Shares of companies owned by former president Soeharto's family and his cronies remained under selling pressure yesterday.
Stockbrokers said most shares linked to Soeharto's family and cronies dropped in the morning but managed to recover in the afternoon as local investors started to take advantage of the low prices.
The Jakarta Stock Exchange (JSX) Composite Index fell 0.66 percent, or 2.74 points, to 414.22 on a total turnover of 178.05 million shares on the regular market worth Rp 208.58 billion (US$20.8 million).
The brokers said most foreign brokerage houses continued to discard shares linked with Soeharto and his close friends, such as Liem Sioe Liong.
A broker with Mashill Jaya Securities said several foreign brokerage houses, like Merrill Lynch Indonesia, Nomura Securities, Jardine Fleming Securities and WICarr Securities, dumped their stocks for almost the whole trading day.
The stock price of Liem's PT Indofood Sukses Makmur continued under selling pressure in the morning but recovered in the afternoon due to fresh buying from local investors. Indofood stocks closed unchanged at Rp 1,675 with 14.09 million shares changing hands.
Shares of PT Indocement Tunggal Perkasa (ITP), part of Liem's Salim Group, also closed unchanged at Rp 2,900 after falling to as low as Rp 2,600.
The stock prices of Bimantara Citra, controlled by Soeharto's second son Bambang Trihatmojo, fell Rp 25 to Rp 300 on a total turnover of 3 million shares.
Toll road operator PT Citra Marga Nusaphala Persada (CMNP), controlled by Soeharto's eldest daughter Siti Hardijanti Rukmana, saw its stock prices remain unchanged at Rp 375 on a total turnover of 2.27 million shares after falling to as low as Rp 350 during the lunch break.
"Foreign investors are worried to hold on to these stocks for fear that they will lose their value," a broker said.
The head of research at Socgen Crosby Securities Indonesia, Goei Siauw Hong, told The Jakarta Post that business deals involving Soeharto-linked firms and the Salim Group had undergone close scrutiny by investors.
"People are starting to question their past business irregularities since Soeharto is no long in power," he said.
President B.J. Habibie has vowed to root out collusion, cronyism and corruption as part of his efforts to bring the country out of its economic crisis.
The rupiah closed at 10,400 against the U.S. dollar in the spot market yesterday, almost unchanged from its close at 10,500 the previous day, but off its day low of 11,000 during the lunch break.
Currency dealers said rupiah trading remained thin since most operators were reluctant to take any position due to the political situation.
"Some people are sensing that the political uncertainty is not over yet and that there will be more unrest," a dealer with a local private bank said.
Positive results of the talks between Hubert Neiss, the IMF director for the Asia-Pacific region, and the government are expected to boost the rupiah's value against the American dollar in the coming days.
"If results of the talks are positive, it should bring the rupiah to between the 9,000 and 8,000 levels in the days ahead," the dealer said. (aly)