Interference haunts stock market: Analysts<\/p>\n
JAKARTA (JP): Concern over market interference is likely to
\nhaunt trading this week, analysts warned, adding that selling
\npressure may continue to slash the index's large gains over the
\nprevious weeks.<\/p>\n
Stock analyst Ahmad Subagja from Niaga Securities suggested
\nthat investors should remain wary, since trading in a market that
\nwas being manipulated was unpredictable.<\/p>\n
"I advise to sell immediately on potential gains, rather than
\nholding on and risking a greater loss," he told The Jakarta Post
\nover the weekend.<\/p>\n
He said that judging from the previous weeks' trading
\npatterns, it appeared as if the stock market had been
\nmanipulated.<\/p>\n
The index had been making gains despite negative market
\nsentiment, Ahmad said.<\/p>\n
In the past few weeks, the Jakarta Stock Exchange (JSX)
\nComposite Index's rally has made it among the best performing
\nstock indices in the world, according to Bloomberg data.<\/p>\n
The upward trend took place in contrast to the rupiah's steady
\ndecline following violent labor protests, and continuing negative
\npolitical news.<\/p>\n
In response, the JSX has initiated a preliminary investigation
\ninto what it called the "unusual gains". The exchange expects the
\nresults of the investigation by next week.<\/p>\n
Among the unusual patterns was the fact that most of the gains
\nwere notched up shortly before the market closed, as if to ensure
\nthe index remained high.<\/p>\n
Ahmad said that this kind of pattern smacked of manipulation,
\nalthough it was as yet unclear who the "market makers" were.<\/p>\n
"Some investors actually are aware of this interference and
\nhave joined the market maker," he went on.<\/p>\n
He said in order to profit from the interference, investors
\nmust position themselves in line with the market maker, something
\nthat is not easy.<\/p>\n
"Therefore, I suggest that profits be taken at the first
\nopportunity," he added.<\/p>\n
For this week, Ahmad saw the index still having upside
\npotentials, providing interference continued to deter selling
\npressure.<\/p>\n
During last week's trading, however, pressure to sell took
\nover, as investors cashed in on the sharp gains the index had
\nmade in the previous weeks.<\/p>\n
It brought the index a touch higher to 437.62, up from 437.59.
\nat the previous week's closing.<\/p>\n
Ahmad predicted the index to remain hovering at 430 this week,
\nwith resistance likely to be meet at 450.<\/p>\n
Elsewhere, stock analyst Ario Ardhikari from PT ABN Amro Asset
\nManagement concurred with Ahmad about his suspicions of market
\nmanipulation.<\/p>\n
He said he saw no incentives strong enough on either the
\neconomic or political front that could have pushed the index up.<\/p>\n
But he noted that the market had a tendency of improving
\nshortly before year's end or in between semesters.<\/p>\n
"The gains appear regularly, though not always, not in every
\nquarter or semester," he explained.<\/p>\n
He said that during these periods, securities firms,
\nespecially fund management firms, were due to report their
\nportfolio performances.<\/p>\n
"They may have done some window dressing to make their
\nportfolios look good," he said.<\/p>\n
Several fund management firms about to report their portfolio
\nperformances may have agreed to prop up prices of certain stocks,
\nwhich in practice constituted market manipulation, Ario
\nexplained.<\/p>\n
Assuming this to be the case, he went on, interference would
\nno longer occur this week as the first semester had passed.<\/p>\n
According to him, without interference to keep selling
\npressure in check, the index was likely to loose ground this
\nweek.<\/p>\n
On the other hand, he said, the market index hac been on an
\nupward trend over the past two months.<\/p>\n
He attributed this development to growing confidence that the
\nimpeachment of President Abdurrahman Wahid would boost the index.<\/p>\n
The President is facing impeachment by the People's
\nConsultative Assembly's special session next month.<\/p>\n
"Investors want to get in while it's cheap on speculation they
\nwill rake in gains after the special session," he said.<\/p>\n
On the currency market, the rupiah has been unable to recover
\nsince it tumbled over news of violent labor and fuel protests
\nsome two weeks ago.<\/p>\n
Since mid-June, the local unit has descended from its tight
\ntrading band at Rp 11,200 against the U.S dollar.<\/p>\n
It closed last week's trading at Rp 11,410 compared to Rp
\n11,398 at the previous week's closing.<\/p>\n
Dealers expect the rupiah to remain sluggish as corporate
\ndollar demand to pay offshore debts still weighs on the local
\nunit. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/interference-haunts-stock-market-analysts-1447893297",
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