Jakarta. Indonesian shares dropped 4.9 percent on Tuesday as the stock exchange witnessed its third 30-minute trading halt in less than a week and investors grew ever more worried about the Covid-19 pandemic.
The Jakarta Composite Index closed at 4,456 on Tuesday, 29 percent lower since the beginning of this year. Rupiah was also battered hard. The currency closed at 15,077 against the US dollar on Tuesday, its weakest level since October 2018.
Just about an hour before close, the bourse hit its circuit breaker and halted trading for 30 minutes since the index had fallen by more than 5 percent.
Among the biggest losers were heavy machinery distributor United Tractor, which fell 6.9 percent, and telecommunication tower operator Tower Bersama Infrastructure, which fell 6.8 percent.
Foreign investors booked more than Rp 1 trillion ($66 million) in net sell-off, bourse data showed, as they sold holdings in top Indonesian banks like Bank Central Asia, Bank Rakyat Indonesia, Bank Mandiri and Bank Negara Indonesia.
Farash Farich, the head of investment at Avrist Asset Management, said investors are still fearing the novel coronavirus pandemic that's now escalating outside China.
On the other hand, Indonesian stocks and bonds are becoming increasingly attractive since companies' fundamentals remain strong, he said.
Depending on an investor's investment horizon, they can opt to put their money in bonds or stocks.
"For investment at this time, it's a very good idea to buy bond exchange-traded funds [ETFs], or index mutual funds. At present, the stock price earning ratio is around 14 times, equivalent to a yield of around 7 percent. That's better than the yield on government bonds, after-tax," Farash said.
The Indonesia Stock Exchange's price earning ratio was at a one-year low of 13.6 on Tuesday.