Indonesian stocks plunge as Jakarta replans partial coronavirus shutdown

Indonesian stocks plunge as Jakarta replans partial coronavirus shutdown

Commuters wearing face protection masks at Tanah Abang Railway Station in Jakarta, Indonesia on August 18, 2020.

Adek Berry | AFP | Getty images

Singapore — Indonesian stocks fell about 5% on Thursday after the capital Jakarta announced that it would resume partial lockdown measures to slow the spread of the coronavirus.

Benchmark decline Jakarta Composite Index In contrast Profits seen in most markets across Asia Pacific. The index was also one of the worst performers in the region so far this year, falling more than 18% as of the closing on Wednesday compared to the 3.2% increase in the MSCI All Country Asia ex-Japan index.

Thursday’s decline was made by Jakarta Governor Anies Baswedan Mass movement restrictions Reuters said it would overwhelm the city’s health system with an increasing number of Corona 19 cases starting next Monday. Jakarta has been partially closed since April, but measures have eased since June.

According to Reuters, the restrictions that will be restored will be similar to those previously imposed, including temporary closures of offices excluding “essential” areas, restrictions on public transport services, and no meals at restaurants.

Jakarta, a city with a population of over 10 million people, was the epicenter of Indonesia’s COVID-19 outbreak, accounting for nearly a quarter of Indonesia’s cumulative infections. In most cases this month, according to government data, the city reported more than 1,000 new cases every day.

Indonesia’s cumulative reported cases of more than 200,000 are the second highest in Southeast Asia after the Philippines, but according to data compiled by Johns Hopkins University, Indonesia has the highest death toll in the region, with more than 8,000.

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Citi Research economist Helmi Armand said Jakarta’s plan to tighten regulations could “reintroduce risks in the macroeconomic and financial sectors” in Indonesia.

“The economic impact of reinforcement of restrictions will depend on the details of the program and how tightly the new rules are enforced,” he wrote in a note on Wednesday.

Indonesia’s largest economy in Southeast Asia has been hit hard by the epidemic. Gross domestic product Down 5.3% in the second quarter Compared to a year ago, it is the first economic contraction since 1999.

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