Analysts expect Jakarta composite index to continue rally<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The Jakarta Composite Index is forecast to continue its rally
\nthis week on the government's plan to raise telephone rates, and
\npositive signs from cigarette sales this year, while the rupiah
\nis expected to fall, analysts said.<\/p>\n
"We shall see several positive sentiments this week, produced
\nby telecommunications and tobacco shares. I predict that the
\nindex will be traded between 525 and 535," said a broker with a
\nlocal security firm.<\/p>\n
The index ended slightly higher last week at 525.500, up just
\n0.812 points on the previous week. Daily volumes averaged 1.08
\nbillion shares worth Rp 630.42 billion (US$76.1 million),
\ncompared with 725.32 million shares worth Rp 382.51 billion the
\nprevious week.<\/p>\n
The broker said that investors would keep their gaze fixed on
\ntelecommunications shares such as those of PT Indosat and state
\nPT Telekomunikasi Indonesia (Telkom).<\/p>\n
The government hinted last week that it would implement the
\ndelayed telephone rates hike soon, following the establishment of
\nthe country's first telecommunications regulatory body.<\/p>\n
Earlier this year, the government raised telephone rates by up
\nto 35 percent; however, following protests from the public the
\nHouse of Representatives annulled the decision, citing the
\ngovernment's failure to meet its promise of establishing the body
\nprior to the hike.<\/p>\n
However, the broker said, negative sentiments would still
\ncloud the index because of uncertainties over sanctions the U.S
\nSecurities and Exchange Commission might impose on Telkom after
\nthe company missed a deadline last week to file its reaudited
\n2002 financial report to the watchdog.<\/p>\n
"The uncertainties will prevent the index from climbing
\nfurther," said the broker.<\/p>\n
Nevertheless, he said, negative sentiment could be balanced by
\ninvestor enthusiasm over the shares of tobacco companies PT
\nGudang Garam and PT HM Sampoerna, following the bright first-half
\nsales performance of the latter.<\/p>\n
Sampoerna, Indonesia's second-largest cigarette company,
\nannounced last week that its first semester net sales rose 5.2
\npercent to Rp 3.471 trillion, from Rp 3.298 trillion a year
\nearlier, due to the increase in retail prices.<\/p>\n
Meanwhile, in the currency market, Bank Mandiri analyst Panji
\nIrawan said that the rupiah was expected to lose more ground
\nagainst the U.S. dollar on security worries ahead of the annual
\nsession of the People's Consultative Assembly on Aug.1 through
\nAug. 10.<\/p>\n
"The underlying sentiment globally and at home is negative.
\nInvestors are liable to hold on to their dollars for fear of
\npolitical unrest during the annual session and possible terrorist
\nissues," said Panji, adding that the rupiah was expected to be
\ntraded around Rp 8,300 to Rp 8,380.<\/p>\n
The rupiah fell to Rp 8,320 against the U.S. dollar last week,
\nits lowest since early June as investors cashed in on gains from
\nthe recent rise in the currency.<\/p>\n
Panji said if the weakening trend continued and the rupiah
\nfell below Rp 8,380, there would then be a possibility of the
\ncurrency falling further to Rp 8,500.<\/p>",
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