Stocks and rupiah dive over unrest

Stocks and rupiah dive over unrest

JAKARTA (JP): Share prices plunged by nearly 5 percent and the
rupiah lost almost 8 percent on fears that escalating riots in
Medan, North Sumatra, will spread to other major cities.

Stock brokers said sell-off of blue-chip stocks and shares of
politically connected companies pushed the Jakarta Stock
Exchange's Composite Index down to 414.62 in moderate trade,
about 5 percent lower than 435.16 the previous day.

The market fear that the often violent student demonstrations
in the country's major cities would descend into the riots which
have hit the North Sumatran provincial capital also wielded a big
blow to the Indonesian currency. It dropped by nearly 8 percent
to end the day at Rp 8,750 against the U.S. dollar.

Sales director of Bahana Securities Bruce Rolph said yesterday
news of the growing social unrest prompted anxious investors to
dump their blue-chip shares and those of politically connected
firms.

"Foreign investors keep selling on a cut-loss position," he
said.

Riots sparked by fuel price hikes have rocked Medan, and
thousands of students and workers have taken to the streets in
other cities in protest against the economic conditions which
have plunged the country into its worst financial crisis in
decades.

"Investors are afraid that the riot in Medan will spread to
other cities. If it happens, it will worsen the already weak
economy," Rolph said.

Research director of Socgen Crosby Securities Indonesia Goei
Siauw Hong said foreign investors were reluctant to put their
funds into the local bourse because they suspected the persistent
sporadic riots could develop into political anarchy.

"Things have changed now as the economic crisis has turned
into a political one," he said.

Hong and Rolph said approval of the International Monetary
Fund (IMF)-arranged US$1 billion credit on Monday failed to
restore investor confidence because the social unrest was now a
more serious problem for the country.

A broker with BZW Niaga Securities said most foreign investors
put sales orders in for politically connected stocks, such as
Bimantara Citra, which is controlled by President Soeharto's
second eldest son Bambang Trihatmodjo, and toll-road operator
Citra Marga Nusaphala Persada (CMNP), under Soeharto's eldest
daughter, Siti Hardijanti Rukmana.

Bimantara Citra's stock price lost Rp 150 to close at Rp 675
on a total turnover of 23.36 million shares. CMNP fell by Rp 75
to end the day at Rp 550 on a total turnover of 17.58 million
shares.

The brokers said blue-chip Astra International slid by Rp 100
to Rp 1,175 on total turnover of 54 million shares, BNI fell Rp
25 to Rp 400 on total turnover of 15.18 million shares, Telkom by
Rp 175 to Rp 2,875 on 20 million shares, Gudang Garam by Rp 625
to Rp 8,575 and HM Sampoerna by Rp 375 to Rp 4,475 on total
turnover of 3.10 million shares.

Total market turnover was around 380.62 million shares worth
Rp 389.34 billion (US$48.66 million).

The social unrest also fueled selling pressure in other Asian
markets.

In Kuala Lumpur, worries about the unrest also spread to its
stock market, with the main price index losing 3.3 percent to
close at 588.39.

In Singapore, shares were lower amid the fears. The main index
fell 20.87 points, closing at 1,448.40.

In Bangkok, Thailand's main index dropped 7.35 points, or 1.8
percent, closing at 393.36, as traders were influenced by the
general downward trend in Asia.

In Manila, shares on the main Philippine index plummeted 56.05
points, or 2.5 percent, to 2,211.13.

In Tokyo, the main index plunged 2.29 percent, or 357.26
points, closing at 15,243.84 on the first trading day after a
long holiday period.

In Seoul, the benchmark index fell 3.9 percent to a 1998 low
of 376.23 points on a series of negative factors, including high
unemployment. (aly)