Blue chip trading expected to boost Jakarta stock market<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
Active trading on blue chips shares will push the Jakarta
\nComposite Index a bit higher this week to rebound further after
\nexperiencing its first drop of the year two weeks ago.<\/p>\n
Analysts predicted the increasing trend would continue
\nthroughout the week, testing the resistance level of 450-455
\npoints.<\/p>\n
\"There is going to be some actions of profit taking, but the
\nindex will go higher with blue chips share leading the movement
\nto test the 455 level,\" stock analyst Hengky Sumarli said over
\nthe weekend.<\/p>\n
The index closed higher last week at 144.38 points, up from
\n436.98 the week before, thanks to active buying on leading
\ncorporate shares in the closing days of the week.<\/p>\n
Hengky attributed the index's sharp increase in last week to
\nthe influx of foreign players, who spurred the index's upward
\nmovement by taking part in shares' buying spree.<\/p>\n
Last week's trading saw active buying in some of the blue
\nchips shares, most notably state-owned telecommunication giants
\nTelkom's and Indosat's, and also the country's largest automotive
\ncompany Astra's.<\/p>\n
The three recorded a significant gains from the trading.<\/p>\n
Aside from corporate actions, active movement in the region,
\nsuch as Thailand's and the Philippine's capital markets, has also
\nserved as positive sentiment for Jakarta stock market.<\/p>\n
That same factors, according to Hengky, would drive the index
\nup this week.<\/p>\n
Zulfikar, analyst of Mandiri Sekuritas, also painted an
\noptimistic outlook for the index this week, saying the index has
\nreached a solid supporting level, that it was unlikely to go
\ndown.<\/p>\n
\"There is strong possibility the index would rise, ending up
\nat the same level of index as last week's would be the worst it
\ncan come up with,\" Zulfikar said.<\/p>\n
Some corporate news, he went on, including government plans to
\nprivatize Indosat, state-owned drug maker Indofarma and other
\nstate-owned firms would remain positive to the market.<\/p>\n
Meanwhile, in the currency market, the rupiah would likely to
\nremain stable with the tendency to strengthen looming large,
\naccording to an analyst.<\/p>\n
Currency analyst from PT Currency Management Group Farial
\nAnwar predicted the local currency during the week would be
\ntraded in a familiar range of Rp 10,150-Rp 10,300 against the
\ndollar.<\/p>\n
\"The rupiah will be hovering steadily at familiar thin range
\nthis week, but it would continue to gradually strengthen as it
\nwas for the past weeks,\" Farial said.<\/p>\n
The local currency ended slightly stronger last week at Rp
\n10,245 from Rp 10,260 in the previous week.<\/p>\n
According to Farial, the gradual increase was caused by high
\ndemand for the rupiah, overweighting demands for dollar from
\ncorporations to repay their debts.<\/p>\n
High demands for rupiah came as results of the recent floods,
\nthe central bank's intervention combined with moves from state
\nbanks and the Indonesian Bank Restructuring Agency (IBRA) to
\nconvert its dollar to rupiah.<\/p>\n
The floods, Farial said, have raised demands for rupiah as the
\ngovernment needs to rehabilitate damaged infrastructures and
\npublic services.<\/p>\n
Insurance companies also needs a huge cash in their hands to
\ncover claims resulted from the floods. It has been reported that
\nthe country's insurance companies are readied Rp 2.5-Rp 5
\ntrillion in cash to settle all the claims.<\/p>\n
The market would also apply a wait and see stance towards the
\nprogress of the much-anticipated divestment of PT Bank Central
\nAsia, which is now entering its closing stages.<\/p>\n
\"Should the process run smoothly, it would give good signal
\nfor the success of others divestment programs, including the
\nplanned sale of Bank Niaga, thus giving confidence for foreign
\ninvestors in the country's banking sector.\"<\/p>\n
The government is planning to sell the remaining of its 51
\npercent of stakes in BCA, the country's largest private banks.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/blue-chip-trading-expected-to-boost-jakarta-stock-market-1447893297",
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