Index likely to keep falling this week: Analysts<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The Jakarta Composite Index, which has been on the decline
\nover the past two weeks, will remain under pressure this week as
\ninvestors are still shying away from the market on concerns over
\npossible attacks on Iraq by the U.S, analysts have said.<\/p>\n
"The increasing tension between the U.S. and Iraq has made
\ninvestors all over the world, including those in Indonesia,
\npanic, and as such will likely drag down the index," Jasso
\nWinarto of Sigma Research Institute told The Jakarta Post.<\/p>\n
Last week, the index closed at 427.8, down 3.5 percent from
\nthe previous week's close of 443.67.<\/p>\n
That was the second successive week the index had dropped by
\nmore than 3 percent.<\/p>\n
Prasti Rindrawati, a stock trader at a local brokerage, also
\nsaw little chance for the index to recover, as bearish market
\nsentiment would prevail, mostly due to global factors.<\/p>\n
"The index will likely keep dropping next week, as sentiment
\nin the market is still negative," Prasti said over the weekend,
\nadding that the possibility of war had forced market players to
\nmove to the sidelines.<\/p>\n
The U.S. has been threatening to launch a military attack on
\nIraq, a move that has sent bad signals across the globe.<\/p>\n
Analysts said while the threats alone had dealt a blow to
\ninvestor confidence -- dashing earlier hopes of a global economic
\nrecovery -- the impact of an actual war would be even more
\ndamaging.<\/p>\n
However, Jasso and Prasti played down concerns that the index
\nwould drop through the 400-point level, saying that unless the
\nwar materialized -- the index would not drop that far.<\/p>\n
"The index will probably decline by about 10 points," Prasti
\nsaid.<\/p>\n
In last week's trading, daily volumes averaged 430.56 million
\nshares, worth Rp 297.1 billion (about US$33.89 million), compared
\nwith the previous week's 284.22 million shares valued at Rp 237.7
\nbillion.<\/p>\n
In the currency market, the rupiah was expected to hover
\nthroughout the week at around the same level, as it had over the
\npast few weeks, a currency analyst said.<\/p>\n
The analyst said the currency's movement would be influenced
\nby domestic rather than global factors.<\/p>\n
"The S&P reports are good news. This could help maintain the
\nrupiah's stability for a while," he told the Post, referring to
\nthe international rating agency Standard & Poor's.<\/p>\n
The agency raised last week the country's foreign currency
\ncredit rating following completion of the rescheduling of
\ncommercial loans owed to private creditors grouped under the
\nLondon Club.<\/p>\n
However, that would be offset by high dollar demand from
\ncorporations, for both debt servicing and import financing, he
\nsaid, citing that state oil and gas company Pertamina? was
\nexpected to buy some dollars to pay for its imports.<\/p>\n
The rupiah ended last week relatively flat at Rp 8,865 per
\ndollar, compared with Rp 8,840 the week before.<\/p>",
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