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ANALYSTS VIEWS 4-Indonesia Jakarta hotel bomb blasts
July 17, 2009 / 5:05 AM / in 8 years

ANALYSTS VIEWS 4-Indonesia Jakarta hotel bomb blasts

(For main story see [ID:nSP522493]) JAKARTA, July 17 (Reuters) - Near-simultaneous bomb blasts ripped through the JW Marriott and the Ritz-Carlton hotels in Jakarta’s business district on Friday, killing nine people and injuring 42 including foreigners and Indonesians, police said.

A car bomb had also exploded along a toll road in north Jakarta, police said. Indonesia’s Metro TV said two people had been killed. No further details on that blast were available.

The bomb attacks, the first in several years, could severely dent investor confidence in Southeast Asia’s biggest economy. The Indonesian government had made considerable progress in tackling security threats from militant Islamists in recent years, bringing a sense of greater political stability.

Islamist militants from the regional Jemaah Islamiah organisation were blamed for numerous attacks between 2002-2005 in Indonesia, including bombings on the island of Bali in 2002 that killed 202 people. Many militants have since been arrested.

SIDNEY JONES, EXPERT ON ISLAMIC MILITANTS, INTERNATIONAL CRISIS GROUP, JAKARTA

"It’s more likely to be a splinter group than JI itself, which doesn’t mean you couldn’t have JI members but it’s very unlikely to be JI as an organisation behind this attack."

CALLUM HENDERSON, CHIEF GLOBAL CURRENCY STRATEGIST, STANDARD CHARTERED BANK, SINGAPORE

"This is a tragic event. Market reaction to date has been relatively muted in anticipation that the government will stay on course and that policies will remain unchanged.

"Indonesia remains a fundamentally good story, thanks in large part to the excellent policies of the government in the last few years.

"It will take time to stabilise again, but we remain overweight on the rupiah."

SEAN CALLOW, CURRENCY STRATEGIST, WESTPAC, SYDNEY

"I would say it damages foreign investor confidence since the attacks appear aimed at Westerners, but not shatter it, so long as there is no further violence for some time.

"Bank Indonesia should be able to keep a lid on dollar/rupiah short term, but it will have a lasting negative impact multi-week, multi-month.

"It solidifies my short-term bias towards buying dollar/rupiah on dips, especially since the rupiah is still up 18 percent since March."

TIM CONDON, HEAD OF ASIA RESEARCH, ING, SINGAPORE

"I liken it to North Korea risks to South Korean assets. Typically it causes a short spike in selling pressure -- but the operative word is short.

"Indonesia is vulnerable and the attacks are negative but people know these are impossible to predict and they are part of the economic landscape. It doesn’t totally eclipse all of the other investor positives -- the economic fundamentals and the political fundamentals.

"The cost of protecting debt from Indonesia IDGV5YUSAC=MG, one of the most frequent Asian sovereign issuers in the offshore market, was unchanged at 280/295 basis points."

RAYMOND TANG, CHIEF INVESTMENT OFFICER, CIMB ASSET MANAGEMENT, KUALA LUMPUR

"We are still positive on the economy and the developments there, despite the bombings. On a long-term perspective, we have not changed our view.

"We’re positive on the banking, the resources and the consumer sectors.

"You’ll get kneejerk reaction but if you look at how the Indonesian market has responded up to now, it’s down 1.3 percent and the currency is down half a percent ... I think people are more positive than negative."

KEVIN O‘ROURKE, POLITICAL RISK ANALYST, REFORMASI WEEKLY

"I think the attacks are devastating for the image of security that Indonesia has built up painstakingly over the past four years.

"The attack is particularly severe for investor confidence because it took place despite strenuous counter-terrorist efforts by the government and has affected the hotels that are seen to be among the most secure in Jakarta and also either killed or wounded numerous prominent expatriate businesspeople." O‘Rourke said he suspected Jemaah Islamiah was responsible.

"It’s an explosion in a hotel. Jemaah Islamiah perpetrate explosions in hotels." WAWAN PURWANTO, ANALYST AT NGO NATIONAL EMPOWERMENT BOARD, JAKARTA "It is a high-tension period and it is likely to remain like that until October when the president is inaugurated.

"We already predicted this as we have seen some unknown movements after the election, like the incidents in Papua. So if something like this happens, it’s not a surprise.

"We will not make any assumption (as to who is behind the attacks) before seeing hard evidence."

PRAKRITI SOFAT, ECONOMIST AT HSBC, SINGAPORE

"After the elections going off so peacefully, the bomb blasts have come as a shock. We don’t have all the details now but investors will be keeping a close eye on this one."

JOANNA TAN, ECONOMIST, FORECAST PTE, SINGAPORE "I think investor confidence will definitely be shaken after this but ultimately, the positives from SBY continuing a second term and relatively good performance in the economy should keep investor confidence supported." (Reporting by Ed Davies, Tyagita Silka, Dicky Kristanto in Jakarta, Kevin Yao in Singapore; Editing by Sara Webb and Jerry Norton)





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