JSX seen to remain bearish due to lack of incentives<\/p>\n
JAKARTA (JP): Trading on the Jakarta Stock Exchange (JSX) is
\nexpected to remain bearish this week due to a lack of new buying
\nincentives.<\/p>\n
The gloomy outlook in the region's markets, combined with the
\nnegative prospect of the rupiah, would continue to cast a shadow
\nin the local market.<\/p>\n
Securities analysts said the year-end holiday mood would also
\nadd negative sentiments.<\/p>\n
The Jakarta bourse will be closed on Dec. 25 and Dec. 26 for
\nChristmas. The market will open again on Dec. 29 and Dec. 30
\nbefore taking a two-day break for the New Year on Dec. 31 and
\nJan. 1.<\/p>\n
\"The holidays will certainly affect trading activities. There
\nis nothing much we can do in the market this week,\" a broker
\nsaid.<\/p>\n
The head of research at a joint-venture securities firm said
\nthat most foreign investors had left the market for their year-
\nend holiday and that this would likely make the market inactive
\nuntil the turn of the year.<\/p>\n
\"I think the market will remain bearish, especially if the
\ngovernment issues no positive incentives during the week,\" he
\nsaid.<\/p>\n
Fears on the possible increase in the number of local
\ncorporate defaults would also affect the market, he said. Such a
\nfear was quite rational because South Korean and Japanese
\ncreditors would not likely be able to roll over their loans due
\nto the financial problems in their own countries.<\/p>\n
\"With Japan and South Korea facing economic crises, the
\ncreditors from these countries would face difficulties in rolling
\nover their loans to Indonesian companies,\" he said.<\/p>\n
\"This is really bad news, but that's the reality Indonesian
\ncompanies are facing now,\" he said.<\/p>\n
He said that most foreign investors did not find any positive
\nincentives to enter the local market in the short term due to the
\nnegative outlook of Indonesian companies.<\/p>\n
Indonesia's foreign debt totaled US$117 billion as of
\nSeptember this year, up 7.3 percent from $109.3 billion recorded
\nin March this year. Private borrowings accounted for $65 billion.<\/p>\n
Fadjar Limin Sutandi of Sigma Batara said that foreign
\ninvestors, who previously controlled about 70 percent of the
\ntransactions on the JSX, had already left the market.<\/p>\n
He said these investors were expected to enter the stock
\nmarket again in the second quarter of next year if the country's
\neconomy improved.<\/p>\n
However, the managing director of Harita Securities, Christina
\nLim, said trading would be stagnant and the JSX Composite Index
\nwould remain below the 400 level for the near future.<\/p>\n
\"If there is a rise in stock prices, it would be superficial
\nbecause the general tone for the coming week is bleak,\" she said.<\/p>\n
Most securities analysts and brokers said that political
\nuncertainty in Indonesia remained high despite President
\nSoeharto's appearance Thursday at the military graduation
\nceremony.<\/p>\n
\"Most foreign investors are still worried about the lack of
\ntransparency about who's going to be the next vice president,\"
\nshe added.<\/p>\n
The JSX Composite Index closed 12.94 points higher at 378.79
\nlast week compared to 365.85 points the previous week.<\/p>\n
The average daily trading volume rose 30 percent last week to
\n560.40 million shares changing hands on the regular market from
\n429.8 million shares during the previous week.<\/p>\n
The average daily value rose 32 percent to Rp 578.27 billion
\nlast week from Rp 437.51 billion during the previous week.<\/p>\n
Cigarette maker Sampoerna rose Rp 150 to Rp 4,150, while
\ncompetitor Gudang Garam increased by Rp 4,100 to Rp 8,100. Bank
\nNegara Indonesia rose Rp 50 to Rp 525, Bank International
\nIndonesia was unchanged at Rp 350, and Bank Dagang Nasional
\nIndonesia dropped Rp 25 to Rp 325. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jsx-seen-to-remain-bearish-due-to-lack-of-incentives-1447893297",
"image": ""
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