Stocks down 1.3% but rupiah recovers slightly

JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX) further declined by 1.3 percent yesterday on growing concern about the country's political instability, but the rupiah rose slightly, dealers said.

"Investors got a little nervous today due to several bomb threats in the city's commercial areas," a dealer with a foreign brokerage said.

The JSX composite index closed 7.26 points lower to 533.48, bringing the total loss to 27.80 points or 4.95 percent over the last two days following mass riots in the city over the weekend.

Only 29 stocks advanced as compared to 55 posting losses.

"Unlike yesterday, we didn't see a large number of selling orders when the market reopened. Share prices slightly moved up in the morning due to a number of buying transactions on big shares like Telkom, Gudang Garam and Bimantara," a dealer with a Japanese-brokerage told The Jakarta Post.

"But buying interest is too weak to support the market today. Most investors remained sidelined with a wait and see attitude," the dealer added.

The dealer, who declined to be named, said yesterday's low trading was also triggered by rumors about several bomb threats in the city's commercial areas at midday.

"The market, which ended down by only one point in the morning session, was weaker in the afternoon as investors began to sell after the rumors spread," he said.

"I think selling pressures will continue tomorrow but it will be slower," Lippo Securities managing director Kelvin Lee told the Post.

Another dealer with a foreign brokerage described the fall as "the reflection of the feeling of uncertainty among foreign investors as to whether the situation will get more tense or less".

Impact

He added that a number of bomb threats in the last two days should not have any impact on the market if people do not tie such threats to the weekend's riots.

Trading value reached Rp 310 billion with 133 million shares changing hands.

Several index movers failed to rebound, including Telkom which dropped by Rp 50 to Rp 3,175 with 8.9 million shares traded.

Gudang Garam and HM Sampoerna declined by Rp 225 and Rp 900 to close at Rp 8,450 and Rp 21,500 respectively.

"The intervention by state-owned securities companies was not strong enough to stop the selling pressures on those big stocks," a dealer said.

Other decliners were Astra International which closed at Rp 2,175 (down Rp 200), BII Rp 5,075 (down Rp 125), Bimantara Rp 2,050 (down Rp 25), Semen Gresik Rp 5,275 (down Rp 425) and Lippo Bank to 2,525 (down Rp 100).

The rupiah bounced back against the U.S. dollar in early trading yesterday after losing nearly 30 points on Monday.

Forex dealers said the rupiah strengthened against the American greenback in early trading to Rp 2,343 against Monday's close at Rp 2,360.

But the rupiah slipped back to Rp 2,350 against the dollar in the afternoon, following the fresh bomb threats.

"In general, the market was calmer even though some foreign- based investors remained nervous," said a dealer at Bank Sumitomo Niaga. He said that many institutional investors who sold the rupiah on Monday returned to buy the currency.

Some investors continued reducing their investment portfolio in rupiah, another dealer said.

The rupiah plunged by nearly 30 points to a two-year low of Rp 2,360 against the U.S. dollar from Friday's close of Rp 2,332 following riots in the capital on the weekend. It rebounded in the afternoon trading. (alo/rid)

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