Cigarette Stock Slump Takes a Toll on JCI

The stock price of two national cigarette companies, PT Gudang Garam Tbk (GGRM) and PT HM Sampoerna Tbk (HMSP), fell to 20 percent during the morning trading session on Monday (9/16) at Indonesia Stock Exchange. Later that day, HMSP’s closing price was Rp 2,290 per share or down 18.21 percent, while GGRM closing price was Rp 54,650 per share or down 20.64 percent.

The fall of the stocks, listed under LQ45 index, was then followed by the fall of Indonesian Composite Index (IHSG): it went down to 6,219 points or down 1.82%. The plunge was as expected since both companies’ market capitalization was big enough to influence the index — the government’s decision to increase the tobacco excise presumably affected the stock price of the two companies.