Stock market shrugs off IMF-led aid package announcement

Stock market shrugs off IMF-led aid package announcement

JAKARTA (JP): Trading activities on the Jakarta Stock Exchange
(JSX) shrugged off the government's announcement on the IMF-led
aid package plan yesterday, with most shares losing ground in
active trading.

The JSX Composite Index, which booked a rare gain on Thursday,
dropped by 2.45 points to close at 500.41 on profit taking.

Total turnover was 801.938 million shares valued at 1 trillion
rupiah (US$282.53 million).

A stock broker at a joint-venture securities firm said trading
activities were seen as more active but most investors sold their
stocks to make a profit.

"A lot of people have been seen in the market making profit
off of previous gains," Christina Lim, president of Harita
Securities, said. "The overall mood remains very cautious," she
said.

Tjandra Kartika of Mashill Jaya Securities said yesterday that
investors seemed to ignore the government's reform package
announcement.

"Besides, there's nothing surprising in the outcome of the
package. The market has long known about the rescue plan," he
said.

Minister of Finance Mar'ie Muhammad announced an agreement
with the International Monetary Fund (IMF) yesterday on a broad
program of reform and financial assistance that could be worth
some $30 billion.

A statement read by Mar'ie said the government believed the
three-year program "will be effective in restoring the health of
the Indonesian economy..."

A director of Asian Development Securities, Naotake Ikeda,
said yesterday that it was very difficult for investors to
predict the market's direction.

But other securities analysts said investors needed time to
digest and evaluate the details of the IMF-led rescue package for
the Indonesian government.

"There is only one thing the market hasn't known, that is the
amount of the financial aid. While everything else ... the market
has known," Tjandra said.

Christina said the announcement did not significantly surprise
stock markets, marked by a fall in share prices yesterday.

"Stock prices even fell on profit-taking on gains they made in
the previous days," she said.

As stocks fell, the rupiah also followed suit easing slightly
lower against the U.S. dollar to close at 3,630/50 compared to
the opening of 3,600/20 in the morning session, currency dealers
said.

The dealers said the rupiah softened against the dollar after
earlier rising when the government announced the rescue package.

They said the Indonesian currency rose to as high as 3,570
from an early low of 3,685 in midday trading, before closing at
3,630/50 on the lack of a positive response to the financial
rescue package announcement by the International Monetary Fund
(IMF) for Indonesia.

A dealer with a local bank said yesterday's announcement of
the IMF-led financial package did not surprise the market,
because the market had long anticipated the financial package,
including the conditions attached to it.

"What the market really wants to know now is the monetary
figure of the rescue package. That's all," he said.

"The financial package, including conditions attached to it,
is no longer a big concern to investors," the dealer said. (aly)