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Jakarta Post

Indonesian stocks close higher after dramatic morning plunge

  • News Desk

    The Jakarta Post

Jakarta   /   Fri, March 13, 2020   /   05:54 pm
Indonesian stocks close higher after dramatic morning plunge Security officers stands beside the stock movement chart board at the Indonesia Stock Exchange building in Jakarta, on March 4, 2020. (Antara/Aprillio Akbar )

Indonesian stocks rebounded during afternoon trading on Friday after hitting circuit breaker in the morning as the government’s announcement of a second stimulus package to cushion the economy from the impacts of the coronavirus soothes investors’ nerves.

The Jakarta Composite Index (JCI) closed Friday’s session 0.24 percent higher at 4,907.57 despite hitting circuit breaker in early trading as stocks crashed more than 5 percent just 15 minutes into the session amid a global market rout. Trading resumed after a 30-minute suspension with the index hovering around a four-year low before rebounding in the afternoon.

On Thursday, trading at the Indonesia Stock Exchange (IDX) was also halted 30 minutes before the end of the session as stocks plummeted more than 5 percent, the first trading suspension since the 2008 financial crisis.

Read also: Trading halted for first time since 2008 over pandemic

“The fiscal stimulus creates positive sentiment among market players. It signals that the government is serious in fighting against the impacts of the coronavirus,” Anugerah Mega Investama director Hans Kwee told The Jakarta Post on Friday.

Indonesia announced on Friday it was allocating Rp 120 trillion (US$8.1 billion) from the state budget to stimulate the economy through tax incentives and subsidies for workers, businesses and families affected by the COVID-19 pandemic.

The second stimulus package announced on the same day, worth Rp 22.9 trillion (US$1.5 billion), would include individual and corporate tax breaks as well as relaxation in loan disbursement and restructuring.

Asian markets were still deep in the red on Friday. Tokyo plummeted 6.08 percent, Shanghai was down 1.23 percent, Hong Kong dropped 1.14 percent while Singapore slipped 1.67 percent.

London, however, jumped 4.36 percent in early trading while Frankfurt soared 3.4 percent and Paris increased 3.96 percent. Dow Jones futures in New York indicates that the index will start the trade with more than an 800-point jump.

Hans also said several companies’ plans to buy back their shares helped shave the index’ loss. As many as 12 state companies had allocated between Rp 7 trillion and Rp 8 trillion to buy their shares from the public while privately listed companies had also bought back their shares to limit the falls.

Read also: Government allocates $8b to stimulate economy as businesses, workers suffer from COVID-19 impacts

A sizeable number of stocks moved into green territory by the end of Friday trading. 

PT Indofood CBP Sukses Makmur (ICBP) rallied upward by 4.28 percent, PT Unilever Indonesia (UNVR) climbed 3.81 percent, PT Bank Negara Indonesia (BBNI) rose 3.48 percent and PT Wijaya Karya (WIKA) increased 3.06 percent.

The rupiah also managed to make back earlier losses and closed the trading 1.76 percent weaker at Rp 14,777.5 against the US dollar after weakening as low as 2.05 percent at some point on Friday to a level unseen in 16 months. (ydp)

 


If you want to help in the fight against COVID-19, we have compiled an up-to-date list of community initiatives designed to aid medical workers and low-income people in this article. Link: [UPDATED] Anti-COVID-19 initiatives: Helping Indonesia fight the outbreak