Sudden upsurge in sales leads to stock drop on JSX

Sudden upsurge in sales leads to stock drop on JSX

JAKARTA (JP): The Jakarta Stock Exchange (JSX) took a steep
plunge last week as a result of a sudden upsurge in selling
orders from foreign investors.

By the end of last week, the JSX Composite Index fell to a 12-
month low of 441.87, down by 27.77 points (5.91 percent) from
469.64 in the previous week.

The decline in the stock market was led by a sell-down of
largely capitalized stocks by foreign institutional investors
throughout last week, which dragged down domestic investors'
confidence in the stock market.

There were three factors which contributed to the weakening
sentiment towards the end of the week.

First, investors who had been buying at the beginning of the
year began to take profit, causing a down-turn in the market.
This was exacerbated by lingering worries of another uptake in
the U.S. interest rate at the end of the month.

Second, the rupiah had been under strong selling pressure last
week due to concern about a greater external debt burden, which
led to fears of a rupiah devaluation. However, this was later
ruled out by the government.

Third, although the correlation appears to be unfounded, the
devaluation of the Mexican currency has caused panic selling on
U.S.-dollar-pegged currencies, including the rupiah.

There were three new listings last week -- toll road operator
Citra Marga, industrial engineering firm Bukaka and industrial
estate developer Jababeka.

Despite solid support, Citra Marga and Bukaka closed the week
up by only one and two points respectively. Following allegations
of controversial trading floor practices, Jababeka shares lost 12
percent from its initial public offering price of Rp 4,950 to
close at Rp 4,350.

Average daily turnover on the regular board increased to
22.41m shares worth Rp 75.53 billion ($34.28 million) last week
from 6.01m shares worth Rp 24.22 billion in the previous week.

Last week's total turnover increased to 221.88 million shares
valued at Rp 834.07 billion from 92.95 million shares valued at
Rp 452.59 billion in the previous week.

As a result of persistent foreign selling, local players were
cashing out of Indosat, Jababeka, Citra Marga, Bukaka, Astra
Int'l, Barito Pacific, Gudang Garam, Sampoerna, Indah Kiat and
Indofood.

Foreign players were the net sellers throughout last week.
Stocks which were actively traded included Indosat, Astra Int'l,
Bukaka, Jababeka, Citra Marga, Indah Kiat, Tjiwi Kimia, Kabel
Metal, Gudang Garam, HM Sampoerna, Indofood and Indocement.

Some of the best performers last week were Tempo Scan
Pacific and Metro Supermarket (up Rp 500 each), Dankos Labs (up
Rp 350), Mulia Industrindo (up Rp 250) and Cipendawa (up Rp 200).
The biggest losers were Unilever (down Rp 3,000), Indorama (down
Rp 2,625), Mayertex (down Rp 2,500), HM Sampoerna and Ometraco
Finance (down Rp 1,450 each).

Losers outnumbered gainers by 109 to 21, while 56 stocks
remained unchanged.

-- Sigma Batara