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Jakarta Post

Jakarta stock index slips 1.5 percent as Wuhan virus spreads

  • Riska Rahman

    The Jakarta Post

Jakarta   /   Fri, January 31, 2020   /   01:48 pm
Jakarta stock index slips 1.5 percent as Wuhan virus spreads Employees walk into the Indonesia Stock Exchange (IDX) building in Jakarta on April 6, 2018. (JP/Aditya Bhagas)

The Jakarta Composite Index (JCI) slipped 1.5 percent during morning trade on Friday as fears over the spread of the new coronavirus were suspected of having affected market sentiment.

The Indonesia Stock Exchange’s (IDX) main gauge hit its lowest level of 5,957.11 and concluded morning trade at 5,966.87 before lunch, hitting below the 6,000 level for the first time this year.

Several of Asia's indexes plummeted to the negative territory as of Friday afternoon with Singapore's Strait Times Index down 0.59 percent, China's Shanghai Composite Index nosediving 2.75 percent, while Hong Kong indexes declined 0.21 percent and South Korea's KOSPI plunged 0.7 percent as of Friday afternoon. Japan's Nikkei and Australia's ASX hovered on the positive side.

Read also: Wuhan coronavirus to affect local stock market until outbreak contained

“Investors are worried that the outbreak will hamper China’s economic growth as the virus is spreading at a rapid rate,” Chris Apriliony, equity analyst at brokerage firm Jasa Utama Capital, told The Jakarta Post over text message.

As of Friday morning, the 2019-nCoV virus’ death toll reached 213 people and the number of confirmed cases rose to 9,692.

The World Health Organization declared a global emergency over the new coronavirus amid a rapid increase in the death toll and number of infected people. The United Nations health agency based in Geneva had initially downplayed the threat posed by the disease but revised its risk assessment after crisis talks.

“Since the virus has been deemed an international emergency, this puts more pressure on the finance sector as investors fear that the virus could potentially hinder economic activities,” Pilarmas Investindo Sekuritas research director Maximilianus Nico Demus said.

Six out of nine sectorial indexes on the IDX ended morning trading in the red. The miscellaneous industry sector recorded the sharpest decline of 2.13 percent, followed by the finance sector with a decrease of 1.83 percent.

Read also: WHO declares global virus emergency as death toll hits 213

Chris also said the sluggish index movement was also caused by a mutual fund case that rocked the country’s capital market. 

In a letter leaked late this month, investment management firm Emco Asset Management last year asked its customers to not redeem their mutual funds as its net asset value (NAV) had plummeted. President director Eddy Kurniawan said the tumbling performance was due to stagnated stock market performance last year.

Meanwhile, the United Kingdom's official exit from the European Union on Friday was not considered to have made impact on the JCI, Chris said.