JSX expects bullish growth next year<\/p>\n
JAKARTA (JP): Better economic growth, share-price correction
\nand some monumental changes in trading and policies will push the
\nJakarta Stock Exchange (JSX) to bullish levels in 1995, the
\npresident of the exchange says.<\/p>\n
Speaking at a year-end press conference here yesterday, Hasan
\nZein Mahmud, however, warned that high inflation, interest rates
\nand increasing deficits in the balance of payments will influence
\nthe performance of the JSX.<\/p>\n
"Foreign fund managers predict that next year's inflation will
\nremain high, at around eight or nine percent, as will the
\ninterest rates. Both are the most influential factors on the
\ntrend of stock markets," Hasan said.<\/p>\n
He noted that although the JSX Composite Index fell to 469.64
\nyesterday from 588.77 on the last trading day of 1993, the market
\nwas able to mobilize funds at a new record high of Rp 10.9
\ntrillion (US$5 billion) this year.<\/p>\n
Hasan predicted that the JSX will show an even stronger
\nperformance next year as most analysts are upbeat on the
\ncountry's economic growth.<\/p>\n
Besides, he said, share-price correction on the JSX is
\nunderway. This year's average price earning ratio stands at 15
\ntimes, much lower than last year's of 25, when the JSX enjoyed
\nits boom.<\/p>\n
"In the coming year, people will be more tempted to buy shares
\non the JSX when share prices are not as expensive as before,"
\nHasan said.<\/p>\n
He predicted that around 40 more companies would enter the
\nJSX, bringing the total number of listed firms to 260 next year,
\nwhile blue-chip shares would remain the prime mover of market
\nactivities.<\/p>\n
The 20 most active shares are expected to lose their
\ndomination of trading activities by 50 percent. This year they
\nhave dominated the activities by 56 percent and last year by 61
\npercent.<\/p>\n
Bullish<\/p>\n
Hasan predicted that companies operating in infrastructure,
\nutilities, retail, consumer products, pharmacy and cosmetics
\nwould likely enjoy bullish growth next year because of people's
\nincreasing purchasing power.<\/p>\n
Labor-intensive companies, such as those operating in
\ntextiles, wood products, sport shoes and handicrafts, may be
\nfacing a bearish future and will surely lose some of their
\ncomparative advantages, such as low labor costs, on the world
\nmarket, Hasan said.<\/p>\n
Hasan said that next year, the JSX will see some monumental
\nchanges, including the introduction of scripless (paperless)
\ntrading and the possible passing of a stock market law by the
\nHouse of Representatives.<\/p>\n
Hasan believes that these changes will triple average daily
\ntrading activities on the JSX to 5,000 transactions next year
\nfrom 1,539 this year and double the average daily turnover to Rp
\n204 billion (US$94 million) from Rp 104 billion.<\/p>\n
The JSX is scheduled to start an automated trading system
\nearly next year when it occupies its new building on Jl.
\nSudirman, South Jakarta, and introduce scripless trading later
\non.<\/p>\n
According to Achmad Daniri, director of trading, the new
\ntrading system will be able to handle 50,000 transactions per day
\nand carry out 40,000 buy and sell orders per hour.<\/p>\n
The present manual system is only capable of handling 3,800
\ntransactions per day.<\/p>\n
Hasan said the JSX will also be linked to computer terminals
\nin a number provincial capitals to let more local investors enter
\nthe JSX.<\/p>\n
However, he declined to mention which cities would be served
\nwith computer terminals, saying that at least all provincial
\ncapitals in Java will have such facilities.<\/p>\n
Hasan also noted that starting next year, open-end investment
\ncompanies will be allowed to operate to attract more small local
\ninvestors.<\/p>\n
"If more and more local investors can be mobilized, I hope the
\ndomination of foreign investors can be reduced," Hasan said,
\nadding that foreign investors are very dominant this year,
\ndominating almost 80 percent of total trading activities, as
\ncompared to last year's 70 percent.<\/p>\n
He calculated that the activities of domestic investors would
\nincrease to 35 percent next year from 23 percent this year. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jsx-expects-bullish-growth-next-year-1447893297",
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