JCI Lower Amid Profit-Taking by Foreign Investors
BY :ARIENTHA PRIMANITA
JANUARY 12, 2015
Jakarta. Indonesian stocks fell on Monday following a three-day rally last week as investors made a profit, taking advantage of a lack of sentiment on the domestic market.
The benchmark Jakarta Composite Index fell 28.73 points, or 0.55 percent, to 5,187.933 on Monday.
It has fallen 0.75 percent so far this year.More than 6.97 billion shares worth Rp 4.89 trillion ($386 million) in total changed hands on the Indonesia Stock Exchange (IDX) on Monday.
Foreign investors made up 35 percent of the total trade in the day as they sold nearly Rp 67.9 billion more than they bought.
Decliners beat gainers by 176 to 100 with most index experiencing decline, except for two indexes.
The basic industry and chemical index of 65 stocks gained 0.59 percent gain along with trade, service and investment of 112 stocks with 0.55 percent gain.
“There is no positive trigger at home that could boost the stock market,” Reza Priyambada, analyst from Woori Korindo Securities Indonesia, told the Jakarta Globe.
At home, political tension is heating up slightly after corruption activists criticized President Joko Widodo’s choices for some of the nation’s top officials.
The latest controversy stems from Joko’s choice of Comr. Gen. Budi Gunawan as the new chief of the National Police.
Budi, former aide to former President Megawati Soekarnoputri, is among several police generals who allegedly have swollen bank accounts, according to reports from the Financial Transaction Reports and Analysis Center (PPATK).
Joko needs the approval of the House of Representatives before he can instal Budi as the new police chief.
Previously, Joko also received flak for his pick for attorney general, in which he appointed H.M. Prasetyo a politician from National Democratic Party (NasDem).
The president doesn’t require lawmaker approval for this post. “There are effects of President Joko’s policies and administration to the market but it is not too significant,” he said.
“We believe that pro and contra in the beginning of an administration is normal, especially as the government had to manage several big issues such as the rupiah exchange rate, the fuel subsidy and the state budget.”
Reza added that investors would wait and whether Joko’s administration could fulfill his campaign promises and announce actions and projects.
He said the market is watching whether Joko can bring real resolution to Indonesia’s biggest woes, like lack of infrastructure development and if he can channel the slashed subsidy spending into more productive sectors.
Some blue-chips stocks are among the laggards during Monday’s stock trading.
Fast-moving consumer goods producer Unilever Indonesia declined 3.39 percent to Rp 32.100 per share.
The decline in Unilever’s share price has a significant impact to the overall index as it has a massive market capitalization of Rp 245 trillion.