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Jakarta shares slump nearly 5 pct to six-month low

JAKARTA: Indonesia's main stock index closed at its lowest level in six and a half months on Monday, sinking nearly five percent amid crashing markets worldwide.

But although the Jakarta composite index closed at below the 530 mark for the first time since September, it got off fairly lightly compared to most Asian markets. A general slump this year had already largely driven away foreign investors.

The index closed down 27.53 points, or 4.9 percent, at 529.26 points.

Analysts said whether or not stocks will rebound would depend on Wall Street's performance overnight and suggested it could test its next main support level at 500 points.

"I tend to say that the index will close near the next support level at 500 points, but we have to look first at the performance of Wall Street later on," said Goei Siauw Hong, an analyst with PT Nomura Indonesia. Among top losers were Indonesia's two main cigarette companies, PT Gudang Garam and HM Sampoerna .

Shares in Sampoerna were down 575 rupiah, or five percent, at 11,000 on 2.4 million shares traded while Gudang Garam was down 1,000 rupiah, or 7.8 percent, at 11,800 on 4.3 million shares.

"Falls in Gudang Garam and Sampoerna were mainly due to general market weak sentiment. But I still recommend a long term buy for the shares," Nomura's Siauw Hong said.

Sampoerna and Gudang Garam were trading on P/Es of 6.5 times and 8.3 times 2000 prospective earnings.

Shares in computer company PT Metrodata the nearest Jakarta has to a high-tech stock fell 275 rupiah to 975 on 23.2 million shares traded.

"Some stocks seemed to recover in mid-morning trade, but then players dumped the stocks again because they are worried about domestic politics," said Gurasa, a dealer with Pentasena Arthasentosa.

Overall the market was thin as investors stayed away from the market amid speculation that President Abdurrahman Wahid may come under attack in the next People's Consultative Assembly (MPR) meeting in August. There have been calls by fringe groups to replace him.

Also affecting sentiment were recent protests about religious clashes in the spice islands and plans to lift a decades-long ban on communism.

Banking shares were more actively traded led by Bank International Indonesia and Bank Lippo but the shares were lower as analysts said the shares were trading much higher than their real book value.

Shares in BII were down 25 rupiah at 100 while Bank Lippo was down 25 rupiah at 125 rupiah.

"BII and Bank Lippo were trading three or four times of their current book value. BII's share price is supposed to be around 30 rupiah," said Ferry Yosia Hartoyo, banking analyst with Vickers BallasHolding Ltd.

The analyst said the recent recapitalisation at BII was mostly used to cover its huge negative equity and it does not have sufficient funds to be used as working capital.

Newly listed Bank Mega closed steady at 1,200 rupiah in its debut.

Some 191 stocks were traded with losers leading gainers 149 to 8 on turnover estimated at 683 billion rupiah.

"The Jakarta market doesn't have players any more. And the index has already been falling quite sharply so far this year," said Adrian Rusmana an analyst with Securities.-Reuters