Stocks drop due to decline in blue chips
Stocks drop due to decline in blue chips
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
were again driven down yesterday by a sharp fall in large
capitalized stocks, stockbrokers said.
The JSX Composite Index ended 0.3 percent lower, down 1.37
points to 490.48, on a total turnover of 317.10 million shares
worth Rp 409.99 billion (US$51.57 million).
Brokers said most investors dumped blue-chip stocks like Astra
International, Telkom and Indosat due to their poor corporate
results.
Astra International announced Thursday a net loss of Rp 279
billion in 1997. Astra's price shed Rp 75 to Rp 1,750 on a total
turnover of 30.12 million shares changing hands on the regular
market.
Domestic telecommunications provider Telkom also dropped by Rp
25 to Rp 3,375 on 6.53 million shares, and international
telecommunications firm Indosat fell by Rp 225 to Rp 12,575 on
41,000 shares.
"Though investors have anticipated such poor corporate
results, they dumped the stock anyway," a broker with BZW Niaga
Securities said.
Brokers also attributed the marginal fall in stock prices to a
continuing shift in portfolio investment, from stocks to bank
deposits, by most investors.
"Again, there is no reason to invest in stocks when banking
interest rates offer much higher returns," Karman Pramurahardjo
of Harita Securities said.
Brokers said the increase of time-deposits rates at most
commercial banks to as high as 52 percent for one-month maturity
had lured local and foreign investors.
Persistent demonstrations for political and economic reforms
by university students across the country have put more pressure
on the lackluster trading activities on the local bourse, brokers
said.
Most brokers said foreign investors feared that student
demonstrations might culminate in violent clashes with security
authorities in the coming days or weeks.
As the stock prices declined, the rupiah remained steady
yesterday, after falling to an intraday low of 8,050, to close at
7,925 against the American dollar, currency dealers said.
The close was slightly higher than the 7,950 of the previous
day.
Dealers attributed the rupiah's strong stance yesterday to the
central bank's intervention in the money market by offering its
short-term promissory notes (SBI) at rates higher than ordinary
auction rates.
They said the central bank offered 52 percent for its one-week
SBI, compared to ordinary rates of 48 percent, two-week notes at
53 percent, against auction rates of 49 percent, and one-month
notes at 52 percent against its auction rates of 50 percent.
"Such higher SBI rates have lured offshore fund managers to
invest their short-term funds in the SBI," a chief dealer with a
joint venture bank said.
Dealers said the rupiah traded at a range from 7,800 to 8,200
yesterday. They predicted it would continue to traded at that
range next week. (aly)