Fear for possible riots still clouds stock trading<\/p>\n
JAKARTA (JP): Widespread rumors of massive riots ahead and
\nafter yesterday's Independence Day celebration would continue to
\ncast a shadow on the local stock exchange this week.<\/p>\n
Securities dealers said investors, many of whom were still
\ntraumatized by the devastating May riots, would most likely
\nsideline the market until the rumors were proven untrue.<\/p>\n
"Although there have been no reports about riots ahead of the
\nweekend, most investors still don't feel comfortable with the
\ncountry's social and political situation," head of research of
\nTrimegah Securindo Lestari David Chang said.<\/p>\n
The Jakarta Stock Exchange (JSX) Composite Index gained ground
\nin extremely active trading Friday after weeks of falls.<\/p>\n
Securities analysts attributed the rare increase in the price
\ngauge on the bullish sentiment in regional markets and the
\n"better than expected" security situation in the capital.<\/p>\n
But they warned that Friday's active trading could not be
\ntaken as an indicator for this week's activities.<\/p>\n
"Though trading transactions rose by almost 500 percent on
\nFriday, it does not mean that investor confidence in the local
\nmarket has recovered," a broker with Mashill Jaya Securities
\nsaid.<\/p>\n
Most securities analysts and brokers shared the common view
\nthat positive developments on the social and political fronts
\nwould certainly determine investor sentiment in the battered
\nlocal bourse in the weeks ahead.<\/p>\n
"If there is no social and political riots early this week,
\npeople will feel comfortable enough to enter the market again,"
\nChang said.<\/p>\n
"And this should improve stock prices on the local exchange as
\nmany stocks have been oversold over the past few weeks," he
\nadded.<\/p>\n
Security officers were visible in most business and public
\ncenters in Jakarta and other major cities across the country to
\nensure security.<\/p>\n
The associate director of state-owned securities house Bahana
\nSecurities, Andre Cita, also said the positive sentiment in the
\nregional market would likely continue this week and such a good
\natmosphere would also be felt on the local bourse.<\/p>\n
But he said the fear of the possible unrest would remain a
\nmajor factor in this week's trading climate.<\/p>\n
Trimegah's Chang said if there were no reports of riots on
\nMonday and Tuesday, the market would continue the weekend's
\nbullish sentiment.<\/p>\n
But he warned that such an improved condition would be short-
\nlived because the fundamental factors of listed companies
\nremained very weak.<\/p>\n
"Investors will be disappointed to see the poor financial
\nresults of most companies in the first semester of this year as
\nan impact of the crisis," he said.<\/p>\n
Financial setbacks due to the 80 percent depreciation of the
\nrupiah against the American dollar, bringing the rupiah to the
\n13,000 level compared to 2,500 before the crisis in July last
\nyear, have caused dollar denominated debts of most listed local
\ncompanies to increase significantly when converted to rupiah.<\/p>\n
"These poor financial results will certainly kill the buying
\nimpetus," Chang added.<\/p>\n
Most stock analysts and brokers said the rupiah's direction
\nwould remain the most important factor in stock trading
\nactivities.<\/p>\n
"If there is an improvement in the rupiah, stocks will follow
\nsuit," one of them said.<\/p>\n
The rupiah closed slightly higher against the U.S. dollar on
\nFriday at 12,700 compared to 12,800 at close the previous week.<\/p>\n
The country's financial market was closed yesterday to
\ncelebrate the 53rd anniversary of independence.<\/p>\n
The Jakarta Stock Exchange (JSX) Composite Price index closed
\n2.1 percent lower to 414.63 last week from 423.61 the previous
\nweek.<\/p>\n
Daily average turnover rose significantly to 277.88 million
\nshares changing hands on the regular market last week from 170.76
\nmillion the previous week.<\/p>\n
Daily average transaction value rose sharply higher to Rp
\n440.41 billion last week from Rp 210.30 billion the previous
\nweek. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/fear-for-possible-riots-still-clouds-stock-trading-1447893297",
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