Govt's banking move casts shadow on stock trading<\/p>\n
JAKARTA (JP): The government's move to freeze the operation of
\nseven commercial banks, and to take over the management of seven
\nothers, is likely to cast a shadow on trading activities in the
\nJakarta Stock Exchange (JSX) this week, stockbrokers and analysts
\nhave said.<\/p>\n
They said positive results from talks between the Indonesian
\ngovernment and the International Monetary Fund (IMF), which were
\nexpected to lift investors' sentiment, had been discounted and
\nwould not, therefore, lure investors to enter the local exchange.<\/p>\n
\"The suspension of the seven banks and the supervision of
\nseven others, mostly listed ones, into the receivership of IBRA
\nwill prevent investors from entering the market despite positive
\nnews from talks between the IMF and the government,\" an analyst
\nwith a joint-venture securities firm said.<\/p>\n
Minister of Finance Fuad Bawazier announced Saturday the
\nsuspension of seven commercial banks and the placing of another
\nseven under the management of the Indonesian Bank Restructuring
\nAgency (IBRA).<\/p>\n
The seven suspended banks are Bank Kredit Asia, Centris
\nInternational Bank, Deka Bank, Bank Subentra, Bank Pelita,
\nHokindo Bank and publicly listed Bank Surya.<\/p>\n
Banks under the management control of IBRA are Bank Danamon,
\nBank Dagang Nasional Indonesia (BDNI), Bank Umum Nasional (BUN),
\nBank PDFCI, Bank Modern Bank Tiara Asia -- all listed banks --
\nand state Bank Ekspor-Impor Indonesia (Bank Exim).<\/p>\n
Stock analysts said that government's new move would force
\nmost investors to dump their portfolios on banking stocks for
\nfear that these banks might close down their operations in the
\ncoming months.<\/p>\n
\"I think the banking stocks will be the hardest hit by the
\nnews because most investors will make major selling off on these
\nstocks this week,\" an analyst said.<\/p>\n
Head of equities of Bahana Securities Bruce Rolph said that
\nmost investors would be forced to switch their portfolios from
\nthese banks to more fundamentally strong ones like bank BNI, Bank
\nLippo or Bank Bali.<\/p>\n
\"Sound banks will benefit from the government's new move to
\ncreate a better banking system,\" he told The Jakarta Post.<\/p>\n
Research director of Mashill Jaya Securities, Tjandra Kartika,
\nshared Rolph's view, saying that the government's new move was
\npart of the country's effort the improve its wrecked banking
\nsystem.<\/p>\n
\"The market should perceive the government's new move as part
\nof the efforts to heal the country's banking system,\" Mashill's
\nTjandra said.<\/p>\n
Some stock analysts predicted that some investors would
\ncontinue to select value stocks for their investment vehicles as
\ninvesting in the banking industry was getting riskier now despite
\nthe government's guarantee.<\/p>\n
Lackluster<\/p>\n
Stockbrokers predicted trading activities on the local
\nexchange would remain lackluster because most investors would
\nshun the market for some time, until the government credibly
\nimplemented all points in the new agreement with the IMF,
\nexpected to be signed this week.<\/p>\n
The JSX Composite Index fell 8.12 points last week to close at
\n533.30 from 542.09 points the previous week.<\/p>\n
Daily turnover for the four trading day -- closed Tuesday for
\nthe end of the 1997\/1998 fiscal year -- averaged 549.45 million
\nshares changing hand on the regular market, compared to 826.30
\nmillion the previous week.<\/p>\n
Daily transaction value was Rp 639.02 billion (US$75.17
\nmillion) last week compared to Rp 915.75 billion the previous
\nweek.<\/p>\n
The bourse will be closed tomorrow in observation of Idul Adha
\nand on Friday April 10 for Good Friday.<\/p>\n
Most blue chip stocks ended lower last week with state
\ntelecommunications firm PT Telkom falling by Rp 350 to Rp 3,900,
\nsatellite operator Indosat by Rp 200 to Rp 13,400, cigarettemaker
\nSampoerna by Rp 500 to Rp 7,500 while its competitor Gudang Garam
\nfell by Rp 700 to Rp 11,200.<\/p>\n
Sound listed banks ended higher last week, with Bank
\nInternasional Indonesia rising by Rp 100 to Rp 800, Bank Negara
\nIndonesia (BNI) by Rp 50 to Rp 600. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govts-banking-move-casts-shadow-on-stock-trading-1447893297",
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