JAKARTA (TheInsiderStories) – Indonesian financial market tumbled follows the “bad news” from domestic and global market. The cigarette tax, trade data and middle east dispute become the major influenced to the domestic market early this week.
Since opening, the Jakarta Composite Index (JCI) weakened almost 2.1 percent before closed at 6,219, or dropped 1.82 percent in the first half day and Rupiah down 0.47 percent to 14,040 compared to US dollar, following the rising of cigarette tax, lowering of August’ trade surplus, and the rising of oil prices followed the a giant oil producer Saudi Aramco’ accident.
Commenting on the market condition, the director at Indonesia Stock Exchange Laksono Widodo explained, the declined was due to the selling pressure on the cigarette stocks, after the government announced to lift excise tax starting Jan. 1, 2020. He reported, at the end of first session, PT HM Sampoerna Tbk (IDX: HMSP) and PT Gudang Garam Tbk (IDX:GGRM) shares collapsed 17.1 percent and 17.8 percent, respectively.
At its lowest point today, HMSP’ stock price had fallen to 22 percent which was the worst performance since 1991. Meanwhile, at its weakest point today GGRM’ share price had dropped by 22 percent as well, marking the worst performance since May 1998.
Foreign investors booked a net sell of Rp484.74 billion ($34.62 million) in all markets. The shares with the largest net foreign sales were Gudang Garam Rp220.8 billion, HM Sampoerna Rp172.8 billion, and PT Bank Central Asia Tbk (IDX: BBCA) Rp84.2 billion.
At the same time, foreign net buy until recorded on PT Telekomunikasi Indonesia Tbk (IDX: TLKM) Rp57.6 billion, PT Adaro Energy Tbk (IDX: ADRO) Rp24.1 billion, and PT Barito Pacific Tbk (IDX: BRPT) Rp20.8 billion.
Previously, minister of finance Sri Mulyani Indrawati announced that the government decided to rise the cigarette tax by 23 percent starting next year. Followed the new policy, its estimating the retail selling price also rose to 35 percent.
While, Analyst Hans Kwee rated that the rise in oil prices also affected the Asian stock markets. At the opening trade, the Shanghai rose by 0.35 percent and and Kospi indices 0.34 percent, respectively. While the Hang Seng and Straits Times indices weakened by 0.51 percent and 0.11 percent, respectively.
The rising of global oil prices due to drone attacks on Saudi Aramco’ oil field facilities, which affected 50 percent of the producer’ oil production. Oil prices jumped over 10 percent on fears of a supply glut as the attack would significantly cut global oil output.
While, investor sentiment also remained on edge as the incident risked increasing geopolitical tensions worldwide. In the mid-day, the price of oil futures for West Texas Index and Brent Oil increased by 11.67 percent to $61.23 and 13.3 percent to $68.7per barrel, each.
In addition to the two factors, trade balance data that is beyond market expectations also weighted the financial market. Statistic Indonesia reported, in August, the trade balance only surplus $80 million, smaller than previous month worth of $940 million. Export data recorded a decline of 9.99 percent and imports fell 15.6 percent.
This weakening also depressed the Rupiah rate. Upbeat trade data report fails to rescue the Indonesian currency fight with the US dollar. The pair hit two-day highs of 14,055 but stalled the upside after Bank Indonesia intervened in the bond market to stem the sharp decline in the Rupiah.
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