Stock prices end lower on profit taking

JAKARTA (JP): After four days of consecutive gains, stock prices on the Jakarta Stock Exchange (JSX) ended 0.2 percent lower yesterday on profit taking by local investors, brokers said.

They said trading activities were light for the day as people were still concerned over the government's currency board plans and renewed social unrest.

"The market was quiet with trading volume declining around 50 percent from previous days," Bruce Rolph, head of Bahana Securities, said.

The JSX Composite Index fell 1.02 points to 495.23 yesterday, with a trading volume of 594.51 million shares valued at Rp 545.39 billion (US$60.59 million).

Rolph said foreign brokerage houses such as Credit Lyonnais and Indosues-W.I. Carr which topped trading volume and value over the past two days were not seen making big orders yesterday.

He predicted trading activities would remain moderate or even decline in the coming weeks as more foreign investors were getting concerned over the country's political situation.

Rolph said both local and foreign investors would become increasingly worried as the March presidential election neared.

Stockbrokers said persistent uncertainty over the country's plan to adopt a currency board system to peg the rupiah to a fixed exchange rate had also caused confusion in the market.

"I think people are anxiously waiting for the announcement (on the currency board), so they don't make any big transactions," one broker with Trimegah Securities said.

"We still don't know whether the government will adopt it or not," he said.

An analyst with a joint-venture securities firm said the market would be dampened by the announcements of disappointing corporate results, as the result of the monetary crisis, in coming weeks.

As stock prices declined, the rupiah remained stable at the 9,000 level against the U.S. dollar.

The rupiah stayed within a small range of between 8,900 and 9,200 throughout the day yesterday opening at 8,900/9,000 and closing slightly lower at 9,050.

"Most operators didn't want to trade as they were afraid of being burned by the peg (currency board plan)," a chief broker with a joint-venture bank said.

The dealer said Singaporean operators, who were normally very active, were relatively idle yesterday.

"I think they are now waiting to see whether the G-7 will have something good for Indonesia," the dealer said.

There are hopes in the market that the Group of Seven (G-7) top industrialized nations meeting this weekend in London could decide on measures to help prop up Asian currencies, including the rupiah.

Analysts said the G-7 nations -- the United States, Japan, Germany, France, Britain, Canada and Italy -- would discuss the Asian crisis as one of their top issues. But most analysts do not believe the G-7 will consider actual intervention for Indonesia. (aly)