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Wednesday, December 9, 2009

Market Ignores 'Rebellion' Issue: IHSG Gain Second Highest in the World


as published in Bisnis Indonesia daily newspaper
Wednesday, 09/12/2009 00:00 WIB
Market Ignores 'Rebellion' Issue
IHSG Gain Second Highest in the World

JAKARTA: The Composite Stock Index (IHSG) stays steady amid corrections in emerging market bourses. Market players seem to ignore political situation ahead of anti-corruption march today.

Foreign investors yesterday kept buying blue-chip stocks and booked IDR157.51 billion in net-buy. IHSG slightly increased by 0.005% or 0.13 points to 2,483.89. In the meantime, the rupiah exchange rate only fell slightly to IDR9,452 per US dollar from IDR9,430.

"Technically, IHSG only has limited rally since it has increased for five consecutive days last week. Rather than monitoring political issues, investors seemed to pay more attention to corporation-generated sentiments, such as the fundamental performance of publicly listed PT Bumi Resources," he told Bisnis yesterday.

In the past week, the political situation has been escalating following President Susilo Bambang Yudhoyono's statement alleging there would be a political movement-interpreted as 'rebellion'-taking advantage of International Anti-Corruption Day celebration on December 9 today. (Not September 9 as written yesterday)

Data by Bloomberg show IHSG this year books the second highest gain in the US dollar, namely a gain of 118.35%, which is only second to Bovespa Brazil, which records a gain of 138.49%.

Earlier this month, the Indonesian bourse was still outranked by two other emerging markets, namely Peru and Russia. However, a correction of 0.2% in the Morgan Stanley Capital Index (MSCI) for emerging market yesterday changed the configuration.

An analyst at PT Dongsuh Investment Management Diky H. Wirawan viewed the national bourse power was not affected by political dynamics, so the 'rebellion' issue behind International Anti-Corruption Day had not impacted the market.

The transaction value recorded by the national bourse yesterday reached IDR2.45 trillion, with 72 share prices increasing and 108 others declining. The Bisnis-27 index jumped 0.13% or 0.31 points to 232.08, while Asian major bourses were corrected, such as the Nikkei-225 (-0.27%), Hang Seng (-1.18%), and KOSPI indices (-0.3).

The emerging market indices have has been corrected for five consecutive weeks. Dubai Financial Market General Index is an emerging market bourse suffering from the worst correction of 6.5%.

The index has slumped by more than 20% since Dubai World announced its US$26 billion's worth of debt restructuring on November 25.

An analyst at PT Anugerah Securindo Indah Viviet S. Putri added Indonesian investors' risk appetite at the moment was far stronger, making it hard for political issues to affect bourse movement.

She gave examples that the bombing of JW Marriott and the criminalization of the Corruption Eradication Commission (KPK) failed to create medium-term disastrous correction on Indonesia Stock Exchange.

Separately, Head of Research at publicly listed PT Reliance Securities Andrew Sihar Siahaan viewed IHSG in the medium-term would continue its rally to probably 2,600 by the yearend and would go to 3,050-3,100 by the end of next year.

President lends support
In the meantime, at his official speech welcoming International Anti-Corruption Day last night, President Susilo Bambang Yudhoyono expressed his support to every event and initiative aiming to voice out the anti-corruption spirit.

The President appealed that the upcoming march should be done peacefully and orderly and should shun any spaces for delinquent parties wanting to take advantage of anti-corruption march.

He also realized that the war on corruption policy would invite corruptors to strike back. Therefore, added Yudhoyono, his administration would be ready to face the strike by marching on without needing to fear of the potential strike from the corruptors.

Separately, the Anti-Corruption Civil Society Coalition (Kompak) stated the march celebrating International Anti-Corruption Day today would run peacefully.

An activist at Kompak Usman Hamid cited that there would be around 20,000 people from various elements joining the march.

He further asked police to anticipate counter-mass action touted to be held against the anti-corruption march. (Bisnis/ags/asa/m03/21/mts/nn/irs)

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