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Stock drops on holiday moods, U.S. bailout
Ika Krismantari , The Jakarta Post , Jakarta | Tue, 09/30/2008 10:19 AM | Business
The Indonesian stock market declined by 0.7 percent for the third trading day Monday on sluggish transactions ahead of the Idul Fitri holidays and a fall in most Asian markets amid renewed concerns over the U.S. financial rescue plan.
The market will be closed tomorrow and will reopen Oct. 6.
The Jakarta composite index dropped 13.58 points (0.7 percent) to 1,832 with a number of bluechips ending the day varied.
PT Bumi Resources, the country's biggest coal producer and the market's second most valuable company after PT Telkom, led the Index fall by dropping 5.9 percent to Rp 3,200 (34 U.S. cents)
State coal producer, PT Bukit Asam (BA) declined Rp 600 to Rp 9,350.
Shares of state-controlled PT Perusahaan Gas Negara, Indonesia's largest gas distributor, dropped by Rp 75, or 3.3 percent, to Rp 2,200 over worries a rise in gas prices will ease following a decline in the price of crude oil.
BNI Securities analyst Norico Gaman said the massive drop in mining and oil companies was driven by the fall in oil prices.
AFP reported crude oil futures in New York fell 3.39 percent to $103.5 a barrel on concerns over long-term global energy demand amidst hopes the U.S. bailout deal will assist the financial sector.
PT Andalan Artha Advisindo Securities head of research Bagus Hananto said the Indonesian market could no longer deny the effects of the crumbling U.S. economy, as the bourse remains attached to regional stock markets.
"The market still awaits the results of the $700-billion U.S. government rescue plan. If it turns out to be a good decision, our market will also be affected," he said.
As reported by AFP, U.S. lawmakers agreed Sunday to the basics of a bailout package aimed at debt-stricken Wall Street banks, sending the legislation designed to stem the U.S. financial crisis to Congress for voting Monday (Tuesday morning West Indonesian time).
Jitters over the bailout have also sent the rupiah falling against the U.S. dollar as overseas investors lose appetite on emerging-market assets.
The rupiah dropped 0.6 percent to Rp 9,440 per dollar.
The rupiah has shed around 3.5 percent of its value against the dollar this month, as many stock market investors sell their local holdings and convert gains to the U.S. currency, putting further pressure on the rupiah.
