The Jakarta Composite Index (JCI) on Wednesday dropped by 2.03 percent to 6,368.27 as Energy and Mineral Resources Minister Ignasius announced the government’s plan to immediately decide a domestic coal price under the domestic market obligation (DMO).
Indonesia Stock Exchange (IDX) director Tito Sulistio said the mining sector dropped 3.56 percent, the biggest loss, followed by consumer goods, which fell by 3.02 percent.
"The market responded to the plan for DMO coal negatively, as this could decrease the revenue of coal mining companies," Tito said at the IDX building in Jakarta.
Ignasius previously signed a decree on a domestic coal price fixed under the DMO, a move that is expected to ease the financial burden of state-owned electricity company PLN.
He said the decree had yet to be issued, however, pending the issuance of revised Government Regulation (PP) No. 1/2017 on diversified mineral resources businesses, a draft of which has been sent to the Presidential Office.
Meanwhile, Tito said the price drop in the consumer goods sector was affected by the decline of cigarette producer PT Hanjaya Mandala Sampoerna’s share price by 4.25 percent.
The company's net profit in 2017 increased 0.7 percent year-on-year to Rp 12.67 trillion (US$885.9 million).
"The company is still profitable, but the share price was corrected, and it contributed around 8 percent to JCI’s movement," the IDX chief added.
Source: Anton Hermansyah / The Jakarta Post
8 March 2018