Stocks fall on Ambon, weak global markets

Stocks fall on Ambon, weak global markets

The Jakarta Post, Jakarta

The Jakarta stock index tumbled by 2.31 percent on Friday due
to negative sentiment created by uncertainty over the domestic
political and security situation, and declines in a number of
benchmark stock markets.

The Jakarta Composite Index ended down 18.554 points at
783.413 on a trading volume of 1.83 billion shares worth Rp 1.07
trillion (US$124 million).

Stock analyst David Ferdinandus of CIMB securities said the
decline was undoubtedly driven by the recent sectarian clashes in
Ambon, the capital of Maluku province, and jitters over the
security situation during the upcoming presidential election.

"Investors are concerned that the recent unrest in Ambon is
being orchestrated by certain parties to worsen the country's
security situation ahead of the presidential election. That is
why foreign investors have decided to pull out of the market and
take what gains they have already made," said David.

He explained that many investors trading on a short-term basis
had decided to leave the market after the Index hit their target
of 800 points.

Excessive sell-offs in selected bluechips, notably those of
telecommunication firms, cigarette companies and banks, pushed
the index lower.

Telecommunications company PT Telekomunikasi Indonesia
(Telkom) was down by Rp 350 at Rp 8,050 and its rival PT
Indonesian Satellite also lost ground, ending Rp 200 lower at Rp
3,975.

Cigarette firm PT Gudang Garam dropped by Rp 350 to Rp 14,600,
while automaker PT Astra International declined by Rp 100 to Rp
5,700.

Bank Central Asia shed Rp 75 to close at Rp 3,900, state-owned
Bank Mandiri declined by Rp 50 to Rp 1,450 and Bank Rakyat
Indonesia lost Rp 100 to close at Rp 1,725.

Aside from local negative sentiment, drops in several
benchmark stock markets due to possible interest rate hikes in
China and the United States also weighed on the market, David
said.

After a market holiday on Thursday, Japan's Nikkei closed 2
percent lower at 11,761.79, tracking a fall on Wall Street after
U.S. growth data showed strong inflationary pressures in the
first quarter.

Taiwan shares also closed down by 4.4 percent at 6117.81.

David said the market was likely to trade in a range of
between 770 and 804 next week.

The rupiah ended steady against the U.S. dollar on Friday to
close at Rp 8,700, unchanged from its close on Thursday, as
rumored intervention by Bank Indonesia managed to curb the
dollar's rise, which was sparked by a sharp drop in the local
stock market, dealers said.

Dow Jones quoted dealers as saying that offshore investors
bought dollars as they unloaded Indonesian stocks.

Bank Indonesia is suspected to have sold dollars when the
greenback was trading at around Rp 8,700.

Bank Indonesia's deputy governor Aslim Tadjuddin said the
central bank was always ready to intervene to help the rupiah if
necessary. He did not, however, specifically confirm that it had
sold dollars on Friday.

Dealers said market players had also bought the U.S. currency
ahead of the long weekend here. The local currency market will be
closed Monday because of a Muslim holiday.