JSX likely to see another downward slide this week<\/p>\n
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
\nare expected to drop again this week following a nearly 7 percent
\ndecline last week.<\/p>\n
Securities analysts estimated that the gloomy outlook on
\nregional markets, coupled with investors' concerns over court
\nchallenges by two liquidated banks whose owners are related to
\nPresident Soeharto, would affect trading activities.<\/p>\n
Other analysts believed that such factors were only part of
\nthe reason for the persistent drop in share prices in the
\ndomestic market.<\/p>\n
They acknowledged the regional impact and worries over the
\nwane of the government's credibility had worsened market
\nsentiment.<\/p>\n
\"But they are not the main factor,\" one analyst said. \"I think
\nthe core problem of the market now is the absence of foreign
\ninvestors,\" he added.<\/p>\n
Many experts earlier said they believed that the government's
\nsuccess in securing a multilateral aid package of up to US$40
\nbillion from the International Monetary Fund (IMF) and several
\nother donor countries would restore confidence.<\/p>\n
\"The response from the local stock market to the bailout
\npackage is, however, not as good as expected due to the lack of
\nforeign presence,\" he said.<\/p>\n
Socgen Crosby Securities' head of research, Goei Siauw Hong,
\nsaid the IMF bailout package would only have a long-term impact
\non Indonesia's economy.<\/p>\n
\"What the IMF wants from Indonesia is to tighten its belt,\" he
\nsaid last week.<\/p>\n
Most analysts said the IMF bailout package, which for a while
\ndid help restore market confidence to shore up the rupiah, had
\nnot been able to enliven the market sentiment.<\/p>\n
They said that without the strong presence of foreign
\ninvestors, the market would remain weak because the capacity of
\nlocal investors was too small to boost trading activities.<\/p>\n
\"Domestic investors are mostly short-oriented. There is
\nnothing much they can do,\" Tjandra Kartika, vice president of
\nMashil Jaya Securities, said.<\/p>\n
Other analysts believed foreign investors would wait and see
\nuntil after the general session of the People's General Assembly.<\/p>\n
Results of the session, which will be held in March to elect a
\npresident and vice president and to approve new State Policy
\nGuidelines, will determine whether foreign investors will return
\nor not, they said.<\/p>\n
Goei Siauw Hong said it would take time before more foreign
\ninvestors were seen entering the local market because even in
\nmicro aspects, such as an expected sharp decline in corporate
\nearnings, the condition was not so promising.<\/p>\n
\"The new listing of some companies cannot help raise market
\nsentiment as the overall markets are in a downward trend,\" he
\nsaid.<\/p>\n
He predicted the main price index in JSX would decline further
\nin the coming weeks on a lack of trading direction.<\/p>\n
\"The stock market has not reached its bottoming-out level. The
\nindex will come to this level in the coming weeks,\" he said.<\/p>\n
Stock brokers said that trading activities in JSX were
\nsluggish last week in the face of a lawsuit filed against the
\nfinance minister and the central bank governor by the owners of
\nliquidated banks.<\/p>\n
Bank Andromeda, in which President Soeharto's second son
\nBambang Trihatmodjo has a 25 percent stake, filed a suit
\nWednesday following its closure, and Probosutedjo, half-brother
\nof the President, followed suit Friday for the liquidation of
\nBank Jakarta.<\/p>\n
Minister\/State Secretary Moerdiono said last week that the
\ngovernment would stand behind the banks' liquidations, adding
\nthat aggrieved parties could seek redress in the courts as
\nallowed by law.<\/p>\n
The government closed down 16 banks as part of the
\ngovernment's drive to restore the financial sector last week in
\nresponse to the bailout package arranged by IMF.<\/p>\n
The JSX composite index fell 34.30 points over the week to
\nclose at 466.116 last week from 500.42 the previous week.<\/p>\n
Total average daily turnover was 376.6 million shares last
\nweek compared to 476.60 million shares changing hands the
\nprevious week.<\/p>\n
Total average daily value was Rp 466.37 billion (US$ 143.5
\nmillion) against Rp 541.21 billion the previous week.<\/p>\n
Most blue chip stocks, especially banking stocks, ended lower
\nlast week with Bank Internasional Indonesia sliding Rp 25 to Rp
\n750, Bank Negara Indonesia by Rp 25 to Rp 750 and Bank Dagang
\nNasional Indonesia by Rp 25 to Rp 475, cigarette maker Gudang
\nGaram by Rp 550 to Rp 9,650 while competitor Sampoerna by Rp 625
\nrupiah to Rp 5,650. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jsx-likely-to-see-another-downward-slide-this-week-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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