Jakarta Stock Exchange Shaken
Wednesday, 20 December, 2006 | 17:11 WIB

TEMPO Interactive, Jakarta: Investors at the Jakarta Stock Exchange (JSX) blindly sold shares yesterday (12/19).

As a result, the JSX index dropped sharply by 50.950 points (2.85 percent) to the level of 1,736.670.

This fall on the stock exchange was also followed by a decrease of rupiah of 58 points from Rp9,087 to Rp9,145 against the US dollar.

Confusion among Jakarta's market players was heighted by the panic of Thai capital market players after the country's central bank restricted foreign fund withdrawals overseas.

About 30 percent of foreigners' funds, of more than US$20 thousand in value, must be deposited without any interest, with funds allowed to be withdrawn after a minimum period of one year.

The Bank of Thailand took this step so as to reduce the high appreciation of the Baht, which has already improved by 17 percent.

The policy created a negative impact at the country’s stock market.

At the close of trading, the SET Thailand share index had dropped by 108.41 points (14.84 percent) to the level of 622.14.

This was the lower point in the 31 years of the country's stock market history.

This decrease was followed by regional markets.

Capital market analyst Hendra Bujang suggested that investors calm down because it was a temporary disturbance.

He said he was optimistic that the index would be back at the level of 1,800 during the first quarter of next year.

The Korean Won and the Filipino Peso have also depreciated.

Rupiah depreciation was caused by market players who were unable to comprehend what had really happened in Thailand.

“After the market knows exactly about the policy's intention, the Rupiah will improve,” he said.

Muchtar Wijaya (pdat) | Suryani Ika Sari | Padjar