Stocks down, rupiah weak over concerns
Stocks down, rupiah weak over concerns
JAKARTA (JP): Share prices on the Jakarta Stock Exchange fell
4.2 percent yesterday, dragged down by a fall in politically
well-connected stocks, while the rupiah remained weak, dealers
and stockbrokers said.
They said the continued dumping of politically well-connected
stocks pushed down the Jakarta Stock Exchange (JSX) Composite
Index to below the 400 point level.
The rupiah, meanwhile, managed to avoid plunging even further
following calls from Speaker of the House of Representatives
Harmoko for President Soeharto to step down.
Dealers said the rupiah strengthened to Rp 12,250 against the
U.S. dollar from its day low of Rp 12,800 on the Jakarta spot
market in late afternoon trading after Harmoko made the appeal.
"The rupiah was rarely traded today, but it was quoted a bit
higher after the announcement. It demonstrated the market's
reaction to the call," a dealer with a local bank said.
He said there was almost no trading at all in the market
because worries about the escalating political tension remained
following the killing of four students by security forces in an
anti-government demonstration, and wide-spread rioting and
looting last week.
The increasing political uncertainty widened the rupiah-dollar
trading band to over 1,000 points. Some banks even quoted the
rupiah-dollar rate within a 5,000 band, he said.
Political uncertainty and increasing calls for Soeharto to
step down prompted investors to dump politically well-connected
stocks, especially those linked to President Soeharto and his
family, stockbrokers said.
The composite index lost 17.02 points to close at 388.91
points. Shares in 107 companies recorded a fall and seven gained
in value. A turnover of 127.71 million shares with a value of Rp
124.18 billion (US$10.13 million) was recorded.
Automotive giant PT Astra International, which is linked to
Soeharto's Nusamba Group, dropped Rp 150 to close at Rp 900. Over
13 million shares changed hands.
Shares in conglomerate PT Bimantara Citra, controlled by the
President's son Bambang Trihatmodjo, fell by Rp 75 to end at Rp
300 on a volume of 9.35 million units.
Toll road operator PT Citra Marga Nusaphala Persada fell by Rp
50 to close at Rp 375 on a volume of more than 12 million shares.
The company is controlled by Siti Hardijanti Rukmana,
Soeharto's eldest daughter.
Meanwhile, PT Humpuss Intermoda, the transportation arm of
Soeharto's youngest son Hutomo Mandala Putra's business group,
was unchanged at Rp 625.
"There are still a lot of things ahead," said Andre Cita,
associate director of PT Bahana Securities, when questioned on
whether he thought the market would rebound if political
stability improved.
He pointed to issues like banking reform and the establishment
of a bankruptcy law.
However, he suspected that there would be a resolution
announced within a week, and if the situation improved and the
rupiah stabilized, the stock market would rebound.
"There are a lot of fund managers currently looking at
Indonesia," he said, adding that many listed companies were
currently trading at very low prices, especially the resource-
based companies and those with a U.S. dollar earnings base. (rei)