Cigarettes companies are nonetheless the big contributors to the country especially the tax that has simultaneously raised for them in three consecutive years. According to daewoo securities, since 2014 cigarettes companies reached 112.5 trillion rupiahs, 139 trillion rupiahs 2015 and predicted around 148.9 trillion rupiahs in 2016.
The ruling on issue of government postponing ratification gives positive sentiment to cigarettes companies stock. Previously, president committed to use local regulation for cigarettes and not to rely on international framework convention on tobacco control (FCTC).
Meanwhile, the postpone of ratification will raise the emitent's income and negatively influencing the purchasing power of smokers since the high price won't lessen the smoking habit of its users.
It is acknowledged that government intended to look for alternative revenue from raising the cigarettes taxes. According to some economy watcher, this should not happen since cigarettes already give big revenue of taxes and under a well managed law control. However, the budget deficit spurs the government to still raise the taxes of tobacco.
From observation Bloomberg, Thursday, May 16, it appears the stock performance of four non observed moving issuers began to improve. Shares of PT Hanjaya Mandala Sampoerna Tbk (HMSP) rose 50 points, or 1.37 per cent to be at Rp3.720 per share. PT Bentoel International Investama Tbk (RMBA) gaining 4 points to reach 0.88 per cent to be at Rp460 per share.
The movement of the shares of PT Gudang Garam Tbk PT (GGRM) experienced a decline Rp725 or 1.13 percent to reach Rp63.625 per share. PT Wismilak Inti Makmur Tbk (WIIM) experienced a decline of two points, or 0.52 per cent to reach Rp386 per share.
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