JCI Slumps for Second Day as Profit-Taking Bites
Bloomberg & JG | October 08, 2010
Jakarta. The Jakarta Composite Index declined for a second day on Friday as profit-taking firmly took hold, analysts said.
The JCI lost 39.23 points, or 1.1 percent, to close at 3,546.95. About 6.4 billion shares worth Rp 5.42 trillion ($607 million) changed hands. Decliners outnumbered gainers 122 to 85.
The index closed just lower for the week, losing less than one point for its first weekly loss since the week that ended on Aug. 27.
As of Wednesday, the JCI has gained 17 percent over the previous five weeks, and set a record high on nine consecutive days before declining on Thursday.
Haryajid Ramelan, an analyst at Capital Bridge Indonesia, said the market needed a significant pullback in order to regain momentum for another push back into unprecedented heights toward the end of the year.
“It’s a fair correction for Indonesian stocks,” Haryajid said.
“This profit-taking action is temporary and will continue for some days ahead, to slow down stocks before they get ready for a better rally until the end of the year, when they will probably touch the 4,000 level.”
Among losers, the nation’s biggest nickel producer, International Nickel Indonesia, fell 1.5 percent to Rp 4,900. Timah, the largest tin producer, slid 1.5 percent.
Nickel for three-month delivery declined 3.6 percent to $23,900 a metric ton in London yesterday, the steepest drop since July 1. Tin futures, meanwhile, lost 2.5 percent to $25,600 a metric ton, falling from a record.
Coal miner Bumi Resources rose 3.4 percent. One of the firm’s directors, Dileep Srivastava, said one of its ventures was interested in buying a 7 percent stake in Newmont Mining’s local unit.
Indofood CBP Sukses Makmur, the country’s largest instant-noodle maker, dropped 4.2 percent on its second day of trading, as wheat futures for December delivery rose 0.2 percent on the Chicago Board of Trade on Thursday, when Indofood gained 10 percent in its first day of trading.
The rupiah slipped 0.1 percent this week to trade at Rp 8,933 against the dollar, as of the stock market close on Friday.
The rupiah appreciated 5.1 percent against the dollar this year as the yield premium offered on the nation’s assets and the expanding economy lured funds.
“The central bank has been active in the market, smoothing flows,” said Gundy Cahyadi, an economist at Singapore’s Oversea-Chinese Banking.
Lindawati Susanto, head of foreign-exchange trading at Bank Resona Perdania in Jakarta, said the central bank was “guarding the bid price in order to avoid the strengthening of the rupiah.
Indonesia’s foreign-exchange reserves climbed by $5.2 billion last month to a record $86.55 billion — the biggest increase since April, Bank Indonesia reported on Thursday.
Policymakers intervene by buying and selling currencies to influence exchange rates.
BI Governor Darmin Nasution said last month that a “stable rupiah was expected to damp pressure from higher commodity prices and pave the way toward lower inflation expectations.” Jakarta Market Roundup