Interest rate fears cast shadow on JSX<\/p>\n
JAKARTA (JP): Fears of a possible increase in American
\ninterest rates is likely to continue to cast a shadow on domestic
\nstock trading activities.<\/p>\n
Securities analysts said that share prices would remain under
\npressure this week as most investors would stay on the sidelines,
\nwaiting for the result of the U.S. Federal Reserve meeting.<\/p>\n
The U.S. Fed is scheduled to hold its Federal Open Market
\nCommittee meeting on May 25.<\/p>\n
The analysts said over the weekend that factors which would
\ncause pressure on the local stock exchange would remain the same
\nas last week -- interest rate fears and estimated declines in
\nbanks' earnings.<\/p>\n
\"Possible interest rate increases and poor performances of
\nbanking stocks will remain the big issues this week,\" Edwin
\nSyuhrizal, from Amsteel Securities Indonesia, said.<\/p>\n
Like other markets, the Indonesian stock exchanges, he
\nstressed, would be affected by any U.S. interest rate hike.<\/p>\n
In addition to the interest rate fears, many investors will
\nalso wait for the announcement concerning listed companies'
\nfinancial reports, said one analyst at DBS Securities Indonesia.<\/p>\n
The JSX composite index dropped 10.73 points to 656.11 from
\nthe previous week's close of 666.84.<\/p>\n
Daily turnover averaged 183.4 million shares, down from the
\nprevious week's 194.9 million shares.<\/p>\n
Daily transaction values averaged Rp 413.10 billion (US$173.6
\nmillion) against Rp 441.96 billion ($185.7 million) the previous
\nweek.<\/p>\n
The stock index lost ground on heavy selling of blue chips
\nincluding Bank Negara Indonesia, PT Telkom, HM Sampoerna and
\nGudang Garam.<\/p>\n
The finance ministry's ruling on cigarette retail prices
\nissued late last week killed the buying mood on cigarette
\nproducers' shares such as H.M. Sampoerna and Gudang Garam.<\/p>\n
The ruling, which asked the cigarette producers to give
\nretailers a 10 percent margin, confused investors, one dealer
\nsaid.<\/p>\n
\"Investors thought that the cigarette firms were required to
\nset aside 10 percent of their profits but they were wrong,\" he
\nsaid.<\/p>\n
The regulation precipitated heavy selling pressure on
\ncigarette producers' stocks, he added.<\/p>\n
HM Sampoerna dropped by Rp 300 to close at Rp 11,050 but
\nGudang Garam rose by Rp 25 to Rp 10,075<\/p>\n
The central bank's low lending target also had a negative
\nimpact on banking sector stocks.<\/p>\n
\"The low lending growth will curb the banks earnings,\" another
\nanalyst said.<\/p>\n
BNI dropped by Rp 25 to close at Rp 1,375, Lippo Bank by Rp
\n100 to Rp 2,450 and Bank Bira by Rp 175 to close at Rp 3,325.<\/p>\n
Telkom's shares pushed the market heavily down on the news a
\nprivate company controlled by Bambang Trihatmodjo was planning to
\noperate in domestic market, previously the preserve of Telkom.<\/p>\n
\"Telkom's drop pushed the market down heavily,\" Edwin said.<\/p>\n
Telkom dropped by Rp 275 to close at Rp 3,625.<\/p>\n
Other losers last were Bank Pikko which dropped by Rp 75 to Rp
\n1,025 and Bank PDFCI which fell by Rp 325 to RP 2,250.<\/p>\n
Last week's gainers, mostly second and third-line stocks,
\nincluded Sekar Laut which rose by Rp 450 to Rp 1,225, Sekar Bumi,
\nup Rp 575 to Rp 2,375 and Soedarpo Corporation, up Rp 225 to Rp
\n1,975. (09)<\/p>",
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"sponsor": "Okusi Associates",
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