Jakarta Stocks Fall Most in Two Years Amid Rout as Rupiah Drops

Updated on

Indonesian stocks plunged the most in two years and the rupiah weakened beyond 14,000 a dollar for the first time since 1998 amid a global equities rout.

The Jakarta Composite Index fell 4 percent to 4,163.729 at the close, its steepest decline since August 2013. The benchmark gauge has lost 9.2 percent in the five days through Monday and entered a bear market on Friday. The rupiah dropped 0.7 percent to 14,046 a dollar, according to prices from local banks. Bonds declined, pushing the 10-year yield up 11 basis points to 9.05 percent, Inter Dealer Market Association prices show.

Emerging-market shares fell the most since 2011 and a gauge of commodity prices sank to a 16-year low amid concern the global expansion outlook is worsening. Foreign funds pulled $587 million from Indonesian equities this quarter and President Joko Widodo is holding a limited cabinet meeting on Monday to discuss how to revive an economy growing at the slowest pace since 2009.

“The currency poses the biggest risk to stocks, coupled with foreign outflows, which are more driven by global factors than domestic,” said Agus Yanuar, president director and head of investment at PT Samuel Aset Manajemen in Jakarta. “Indonesian stocks are already cheap, so we’re hoping that they’re starting to reach the bottom.”

PT Unilever Indonesia dropped 4.5 percent, PT Astra International retreated 6.2 percent and PT Bank Central Asia fell 4.8 percent. The Jakarta gauge declined 20 percent in 2015, the second-worst performance in Asia.

Indonesia’s biggest fund manager is taking the slump as a cue to start buying again, Elvyn Masassya, president director of BPJS Ketenagakerjaan, said on Sunday.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE