Analysts expect JSX share prices to remain strong<\/p>\n
JAKARTA (JP): Jakarta Stock Exchange (JSX) prices would remain
\nstrong, especially with the performances of big capitalized
\nstocks and second line stocks, securities analysts have
\npredicted.<\/p>\n
Vickers Ballas Tamara securities said JSX prices rose 7
\npercent in January, making the country's share market one of the
\nregion's strongest.<\/p>\n
The strong market was because of Indonesia's macroeconomic
\nfundamentals, it said.<\/p>\n
Vickers Ballas Tamara said the rise was partly driven by
\nforeign institutional investors buying blue chips like Bank BNI,
\nAstra International, Gudang Garam, HM Sampoerna, Indosat, PT
\nTelkom and liquid stocks such as Davomas Abadi, Sekar Bumi, Kalbe
\nFarma, Ramayana, Jakarta International Hotel Development, Fiskar
\nAgung and PT Steady Safe.<\/p>\n
The liquid stocks, which were grouped with second line stocks,
\nwere said to be still undervalued and expected to perform
\nstrongly.<\/p>\n
Chocolate producer PT Davomas Abadi was one mid-sized stock
\nmentioned. Vickers ballas said Davomas Abadi's shares would
\nremain upbeat as world demand for chocolate products, especially
\nin Eastern Europe and Asia, remained strong.<\/p>\n
Although the company's share of the world cocoa butter
\nproduction is only 2.3 percent, it is helped by cheap labor and
\nan abundant supply of cocoa beans meant Indonesia's cocoa
\nprocessing industry would remain competitive.<\/p>\n
Furthermore in view of its 1997 projected price earnings ratio
\n(PER) of 7.9, as against the sector's average PER of 15.2 times,
\nthe company's shares are still attractive, the analysts said.<\/p>\n
The company's net profit in 1995 was Rp 23 billion and its
\n1996 projected net profit was Rp 40 billion and net earnings for
\n1997 are tipped to be Rp 58 billion.<\/p>\n
Surabaya shrimp processor PT Sekar Bumi's shares were
\nprojected to perform well as world demand for shrimp rose.<\/p>\n
Vickers Ballas Tamara said Sekar had a strong growth record
\nand had secured an adequate shrimp supply from its partner which
\nwas developing a 500-hectare shrimp pond in Sumbawa, West
\nTenggara.<\/p>\n
The firm posted a Rp 25.3 billion net profit in 1995, was
\nexpected to earn Rp 26.6 billion in 1996 and Rp 32.3 billion in
\n1997.<\/p>\n
As Indonesia improves its infrastructure, telecommunication
\nstocks will benefit.<\/p>\n
PT Indosat's stock remained attractive and its earnings per
\nshare growth was projected to be about 10 percent this year.<\/p>\n
Indosat recorded a net profit of Rp 459 billion in 1995 and
\nexpected to earn Rp 493 billion in 1996 and RP 543 billion in
\n1997.<\/p>\n
PT Steady Safe is projected to be strong with the operation of
\nits new ferries and trains.<\/p>\n
The company recorded a net profit of Rp 35.2 billion in 1995
\nand was projected to earn of Rp 43.7 billion in 1996 and Rp 90.3
\nbillion in 1997.<\/p>\n
The strong performance of the transport sector was attributed
\nto the government's deregulation measures which allowed private
\noperators in land, sea and air transportation.<\/p>\n
But the overall situation in the Indonesian stockmarket was
\nsupported by the relocation of funds from other countries into
\nIndonesia.<\/p>\n
Other than that, the country's price earning ratios are still
\nlow compared to other markets, analysts said.<\/p>\n
Edwin Syuhrizal of Amsteel Securities said: \"Indonesia's PER
\nis among the third lowest in Asia,\".<\/p>\n
He said that with such low PER, the country's share market had
\nroom for the share prices to rise.<\/p>\n
The strong performance of some second line stocks pushed the
\nJakarta Stock Exchange (JSX) composite index to a record high.
\nThe JSX recorded a market capitalization of Rp 237.55 trillion
\n(about US$101.05 billion) Thursday.<\/p>\n
The new market capitalization of $101.05 billion saw the JSX
\nsurpass the Thailand Stock Exchange's record market
\ncapitalization of $96.69 billion and the Philippine Stock
\nExchange's $80.67 billion.<\/p>\n
The JSX composite index recorded its new high of 694.28, up
\n56.85 points from 637.43.<\/p>\n
However, the highest index recorded in seven years was in
\nApril 1990 when the country's largest automaker, PT Astra
\nInternational, listed on the stockmarket pushing up the index to
\n681.99. (09)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/analysts-expect-jsx-share-prices-to-remain-strong-1447893297",
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