JSX may breach 600-level this week: Equity analysts<\/p>\n
JAKARTA (JP): The Jakarta Stock Exchange (JSX) composite index
\ncould breach the psychological 600-level this week as bullish
\nsentiment will most likely improve on the back of good news
\nexpected from some public companies, securities analysts said
\nhere over the weekend.<\/p>\n
\"Several big companies will release better than expected
\nfinancial reports this week and will certainly improve the
\ntrading mood,\" an analyst said.<\/p>\n
Lukman Hakim, an analyst at PT Ludlow Securities, said that
\nforeign investors, who pulled out from the market two weeks ago,
\nmight again reenter the trading floor to test the market.<\/p>\n
\"Some foreign players started rebuying blue chips last week
\nand more will likely come back this week,\" he said.<\/p>\n
Other analysts shared Lukman's view that the expected
\nimprovement in the country's economic fundamentals and in the
\npolitical atmosphere were the main factors, which brought back
\ninvestors' confidence.<\/p>\n
Lukman added, however, that profit-taking during the first two
\ndays of the week was possible, which would then be followed by a
\nfavorable market as most share prices were still below their book
\nvalue.<\/p>\n
Positive sentiment will surely be well-supported by the
\nexistence of active foreign investors in the market, he remarked.<\/p>\n
A big number of foreign investors left the JSX to go for
\ntechnology-related stocks in other stock exchanges in the region
\ntwo weeks ago.<\/p>\n
\"They are now here again to benefit from the cheaper prices of
\nblue chip shares,\" he said, adding that the larger presence of
\nforeign investors would certainly enliven trading activities.<\/p>\n
But an analyst at securities company PT Bhakti Investama was
\nnot so optimistic about the presence of foreign investors.<\/p>\n
Foreign players on the JSX, who mostly manage portfolio
\ninvestments from their respective home countries or regional
\nbases in Singapore or Hong Kong, usually take some time to
\nreenter the market here once they pull out, he said.<\/p>\n
\"It takes time because more parties are involved as foreign
\ninvestors might have their banks, brokerage companies and stock
\ncustodians located abroad, apart from those that they are
\ninvolved with in Jakarta,\" he said.<\/p>\n
Besides, the decision-making process of foreign investors was
\nusually more time consuming and more thorough than their
\ncounterpart local investors, he added.<\/p>\n
Complementing the positive sentiment created by the optimistic
\nnews on corporate action plans, according to Lukman, was the news
\non a memorandum of understanding between the JSX and the
\nAmsterdam Exchange on the possible mutual listing between the
\nexchanges in the near future.<\/p>\n
\"Dual listing with a high caliber stock exchange like that in
\nthe Netherlands will easily boost our composite index,\" Lukman
\nsaid.<\/p>\n
Other analysts said the firm stance taken by the management of
\nthe JSX against companies which violated trading regulations also
\ncould contribute to the improvement of investor confidence.<\/p>\n
The JSX suspended last week the trading of two hospital
\ncompanies whose merger plan was judged by the exchange management
\nto have a conflict of interest and which would possibly harm
\npublic investors' interest.<\/p>\n
Another case was an insurance company which had practically
\nchanged its core business and as a consequence there was a
\npossibility it was violating the prevailing law on insurance
\ncompanies.<\/p>\n
Unlike stock trading, the rupiah is expected to be mixed this
\nweek as demand for dollars will exceed supply, although there is
\nspeculation that the Indonesian Bank Restructuring Agency (IBRA)
\nwill continue to sell its dollars for rupiah.<\/p>\n
IBRA had to convert its dollar holdings in the form of
\ndeposits to rupiah to meet its task of paying the government up
\nto Rp 17 trillion by the end of March to help finance the current
\nfiscal year state budget.<\/p>\n
IBRA was seen selling dollars late last week, providing a good
\nground for the value of the rupiah by the end of the week.<\/p>\n
The rupiah ended stronger last week against the U.S. dollar at
\n7,380, compared to 7,448 the previous week.<\/p>\n
The JSX composite index surged 8.7 percent last week to close
\nat 596.18 points, up from 548.55 the previous week. The daily
\naverage transaction value increased to Rp 992.52 billion last
\nweek, compared to Rp 703.11 billion the previous week.<\/p>\n
Meanwhile, treasury bonds traded on the Surabaya Stock
\nExchange (SSX) recorded no transactions for the past three weeks.<\/p>\n
It booked transactions worth Rp 6 billion in the three-year
\nfloating rate bonds, priced at 96 percent of the bond face value
\nfour weeks ago.<\/p>\n
The SSX traded Rp 2.16 trillion of the total Rp 255 trillion
\ntreasury bonds issued by the government last year to finance
\nrecapitalization costs of the country's ailing banks. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jsx-may-breach-600-level-this-week-equity-analysts-1447893297",
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