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)