Traders said sellers were being kept partly at bay a stock exchange's move to impose a 10 percent limit on stock price moves.

The introduction of the 10 percent limit, either up or down, will prevent investors from "selling too fast, too quick", said David Chang, head of research at UOB Kay Hian.

"Today is going to be more positive because of some measures taken in the stock market to prevent stocks to go down more than 10 percent," he added.

Chewwie gets in on the act with a few comments.

A state of financial crisis is no time for a state of denial


Lin Che Wei, CFA, Jakarta

The important question to ask at the moment is whether Indonesia is in a state of crisis. Fundamentally, the Indonesian economy is much stronger and more sound than when Indonesia suffered through the Asian economic crisis in 1998.

However, this fundamental comparison is of little use because the source of the current problem is not in the fundamentals but in the crises of liquidity and confidence.

I like to use the analogy of a strong ship in a small river that is part of a bigger network of rivers. When the water level falls, the journey will be problematic no matter how strong the ship is. That is exactly the situation that Indonesia is facing now.

As a relatively small stock market with limited liquidity, the Indonesian market was easily influenced by the bigger interrelated stock markets around the globe and prone to the liquidity rush. A concentration of trading volume on Bakrie's related companies, which were heavily geared and heavily speculated upon, triggered the whole market meltdown last week.

Although Indonesia's economic fundamentals are stronger now than at the beginning of the Asian crisis, this does not mean Indonesia will be insulated from the global liquidity crunch. There are three problems that underlie the current capital market meltdown.

The first and the most serious problem is the top decision makers' state of denial -- they are arguing that Indonesia is not in a state of crisis. This attitude obviously rattled market confidence. How is the government expected to take a proactive approach to solve the problem when everyone is still denying there even is a problem?

We claim we are not in crisis even though our stock market has dropped by almost 50 percent. We claim we are not in crisis even though neither investors nor issuers believe anymore in the capital market function. We claim we are not in crisis even though everyone is tightening up and running for cover by reconsidering their investments and capital expenditure. How very ironic.

This all reminds me of the government's attitude during the early stages of the financial crisis in 1997. The financial sector and real sector are closely related and the failure in the financial market will sooner or later pass through to the real sector.

Second, we are facing a dysfunctional capital market system. The capital market is supposed to be an efficient delivery mechanism for fund mobilization and allocation as well as for price discovery of assets and risks. When the share price no longer reflects the fair price of assets because of irrational behavior, the capital market can be called dysfunctional.

A dysfunctional capital market is a serious problem for a financial system because it is crucial for supporting economic growth. When it is much better to buy shares in plantation companies or to buy financial assets than to do the planting or increase the machine capacities, there will be no capital expenditure made. Economic growth cannot be expected.

Third, there is a too-big-to-fail syndrome in the capital market. We have to learn the hard way that the disproportionate concentration of wealth and leverage in certain counters in the Indonesia Stock Exchange is not healthy. We can also say that market discipline has failed to enforce prudent monitoring and failed to rule out excessive funds being concentrated in a few counters.

Indonesia suffered a too-big-to-fail syndrome in the market as the recent liquidity problem faced by the Bakrie Group of Companies led to the rush for the exit from other stocks on the Indonesia Stock Exchange.

Obviously the threat of the too-big-to-fail syndrome in the corporate sector directly affected investor confidence in the market. The capital market is an integral part of the financial system. It should provide efficient delivery mechanisms for savings mobilization and allocation, risk and liquidity management and corporate governance.

For sure we cannot ignore the improvement in areas of prudential supervision, the accounting and disclosure requirements, legal and judicial systems, proper sequencing of financial liberalization, good monetary policy and price stability, as well as healthy reserves and a strong banking system. However, these things are not enough to prevent a capital market meltdown when global liquidity dries up.

To prevent a further crisis we have to rectify the dysfunctional capital market and prevent the too-big-to-fail syndrome in the corporate sector. More importantly, we need to admit that we are facing a serious situation that requires a proactive solution.

I strongly believe that the overhang in the Bakrie Group due to margin trading pressure will find its own solution. Unfortunately, I also believe that the global uncertainty will stay with us for a long time. Indonesia needs to adopt a comprehensive, proactive program to address the issue of the too-big-to-fail syndrome and create a proper mechanism of market surveillance to keep the capital market functioning properly. In the current situation, regulatory intervention to ensure the market continues to function properly is crucial -- the regulator needs to stay ahead of the market and reacting alone is not adequate.

Lin Che Wei is founder of Independent Research & Advisory Indonesia. He can be reached at lin_chewei@pacific.net.sg

JakChat should go into the banking business. looks pretty easy.

Bank of JakChat

ATM;s with attitude!

Or it could be this type of banking we do. Enough on here to support it!!

^^^^ Do you lose interest after you withdraw?

Wonder how the Blok is doing, any reports from there, girls?


Prostitution has not suffered drop-off despite economic meltdown

It's still a good time to be morally bankrupt.

The plunging Dow Jones and panicky investors are hardly a problem for the world's oldest profession, where business is still brisk.

"The market is down, business is down, but we feel it less," said Dylan, 24, a promotional model-turned-Manhattan prostitute. "We're still busy."
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The long-haired, long-legged hooker then explained why the red-light district remains a blue-chip commodity: "If men are horny, they're going to come in here."

Take that, Ben Bernanke.

Dylan works for a Manhattan madam who runs a pair of prostitution dens north of Wall Street. Unlike the $4,000-an-hour girls of male fantasies or gubernatorial road trips, Madam Sadie's employees charge $260 for 60 minutes - or $160 for 30 minutes.
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"The $1,000-an-hour girls are just not making it" with the economic downturn, the madam said. The faltering economy actually drove two of her newer employees to the madam's sex-peddling service from other careers.

Shana, 42, lost her $45,000-a-year job as a secretary last year. Sienna was laid off in July from her job as an executive assistant with a travel agency.

Shana, who worked briefly as a waitress before hooking up with her current gig, is putting her son through college.
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"He's trying to get an engineering degree," she explained. "With the economy the way it is, how is my son going to get a loan? And he's going to finish college."

Co-worker Sara, a 26-year-old former hairstylist, said her services provide businessmen with a break from the grim realities of their 9-to-5 jobs.

"Some of them seem depressed, and they just want a place to get away from it," said the petite, dark-haired woman.

Sadie admits her business has suffered a bit in the fiscal crisis. Some clients are cutting back on their spending, and some aren't returning, she said.

Sienna, who's earning a graduate degree in English literature, mentioned a Manhattan banker who's among her regulars. He now spends less time and money - although he doesn't miss his regular appointments.

"He used to spend at least an hour or two," she said. "Lately he's down to a half-hour, and he's no longer a big tipper."

But Dylan said business was steadier in her new position than when she was chasing down modeling jobs.

"The money is good in that field," she said, "but you don't always get the work."

Business is also booming at Jakarta's classiest nightspot, Papa Cafe on Jalan Jaksa, mainly because it has started featuring great live music:

I don't think many people would have got that one Ken (I did)

I did too. Ken's back and he means business.

'it 'im Terry. 'it 'im Jankis.

bastard never gave his wife the credit for that one did he! Mr "write the theme tune, sing the theme tune" never wrote that song.

All the hits, available for download on MP3

HERE

And now over to....

So who bought some IDR when it was over 10,000........

just missed out on 10000. settled for 9850. i think everyone was waiting for it to tip 10000 before buying, thus forcing the rate down again very quickly.

i should work on a tipping point of 9900 and not wait for 10000.

And now for a look at the volatile situation across the world markets: