JSX still looks for new direction: Analysts<\/p>\n
JAKARTA (JP): Several analysts have predicted that the Jakarta
\nStock Exchange (JSX) is still looking for new direction this
\nweek, while an academician noted that the capital market would
\nnot gain fundamental support this year as a result of the
\ncountry's tight money condition.<\/p>\n
\"I would say that investors will try to take profits just to
\nmake sure that they have fresh money in hand to anticipate
\nseveral new initial public offerings (IPO),\" research director of
\nPT Sigma Batara, Fadjar L. Sutardi, told The Jakarta Post on
\nFriday.<\/p>\n
\"The market is likely to remain quiet next week. But within
\ntwo weeks, it will get a boost from two or three IPOs,\" Lippo
\nSecurities' managing director, Kelvin Lee, said.<\/p>\n
Another analyst, who preferred anonymity, said that there is a
\nstrong indication that foreign investors will show an interest in
\nsome of the planned IPOs despite the relatively small size of the
\nofferings.<\/p>\n
Fadjar said that as far as different sectors are concerned,
\ninfrastructure-related companies and consumer goods firms will
\ncontinue to perform well.<\/p>\n
\"Other companies, which already have regional or international
\ncompetitive edges, like glass manufacturers and ceramics
\nproducers, will also get a positive sentiment from long-term
\noriented investors.\"<\/p>\n
\"It's worth noting that investors also evaluate companies on
\nthe basis of their regional or international competitiveness to
\nenter the forthcoming free trade era,\" Fadjar added.<\/p>\n
Lee told the Post over the weekend that the stock market
\nshould get positive support from Bank Indonesia's plan to issue
\nbonds in the United States.<\/p>\n
\"The bond issue will give a benchmark for private companies.
\nAnd we must not forget that our stock market also sells bonds. So
\nI think it's very helpful for the growth of our stock market,\"
\nLee added.<\/p>\n
He said that despite the stagnant performance in the last four
\nweeks, the capital market feels that investors' sentiment is
\nstill positive.<\/p>\n
\"As I said before, as long as the transaction volume is
\nconcerned, the market is still strong,\" another analyst said.<\/p>\n
The JSX composite index has increased by 104 points, or 20
\npercent, in 1996 from this year's opening level of 513.8 points
\nto 617.4 at the end of May.<\/p>\n
In the first five months alone, the JSX recorded total trading
\nvalues of approximately Rp 27 trillion (US$11.4 billion), a level
\nequivalent to 84 percent of 1995's total trading values.<\/p>\n
\"It's also a positive sign that the impact of the government's
\ncontroversial \"Timor car\" policy is very minimal now,\" the
\nanalyst added.<\/p>\n
Under the policy, the government is giving significant tax
\nbreaks to PT Timor Putra Nasional to produce a \"national car\", to
\nbe called Timor.<\/p>\n
A senior University of Indonesia lecturer, Dorodjatun
\nKuntjoro-jakti, however, noted that the stock market will not get
\nfundamental support from the Indonesian macro-economy this year.<\/p>\n
He said that as the government wants to cool down the economy
\nthrough a tight money policy, portfolio investments should become
\nless attractive.<\/p>\n
\"No wonder, the JSX has yet to see new initial public
\nofferings this year,\" Dorodjatun told a meeting attended by more
\nthan 200 executives of the JSX, the Surabaya Stock Exchange and
\nsecurities companies on Friday.<\/p>\n
Besides Dorodjatun, the meeting also presented the chairman of
\nthe Capital Market Supervisory Agency (Bapepam), I Putu Gede Ary
\nSuta, as a speaker.<\/p>\n
Dorodjatu said that there has been a large amount of fund
\ninflows but only a very limited part of those funds went to the
\nstock market.<\/p>\n
\"I think foreign investors are trying to take advantage of our
\nhigh interest rates,\" he added.<\/p>\n
Anticipation<\/p>\n
Share prices on the JSX decreased by 0.1 percent last week, as
\ncompared to the 0.6 percent decline in the previous week, with
\nthe composite index closing at 617.46 last Friday.<\/p>\n
Several analysts contacted by the Post shared the opinion that
\nthe market was very quiet as investors were preparing for the
\nforthcoming IPOs.<\/p>\n
\"Some domestic retails still tried to speculate on certain
\nstocks while most foreign investors stayed on the side lines,\" a
\ndealer said.<\/p>\n
An analyst said that within two weeks, there might be three
\npublic offerings, including London Sumatra (a plantation firm),
\nLippo Karawachi (a property company) and Citatah (a marble
\nproducer).<\/p>\n
\"I think those companies will get Bapapem's approval next
\nweek. They should have got it this week but Bapepam was too busy
\nwith the Bank Mashill case,\" according to an analyst who asked
\nnot to be named.<\/p>\n
The JSX recorded total transactions of 367 million shares
\nworth Rp 1.1 trillion last week. Foreign buy transactions reached
\nRp 773 billion against sell transactions of Rp 665 billion.<\/p>\n
A paper giant, Inti Indorayon Utama, was among the top losers
\nlast week. Its share price plunged 11 percent to Rp 2,100 from Rp
\n2,375 because of disappointing first quarter results.<\/p>\n
The largest producer of purified terephthalic acid (PTA),
\nPolysindo Eka Perkasa, also saw a 29 percent drop in its share
\nprices to Rp 1,275 last week.<\/p>\n
One of the top gainers last week was Great River Industries,
\nwhich closed the week 10 percent higher at Rp 2,600, with 55
\nmillion shares traded.<\/p>\n
Great River announced that it booked net sale revenues of Rp
\n52 billion in the first quarter of this year, indicating a 25
\npercent increase over the same period of last year, while its net
\nprofits rose 63 percent.<\/p>\n
Great River said in a statement obtained by the Post over the
\nweekend that it will also split its stocks today by halving the
\nnominal value to Rp 500. The stock-split will increase its total
\nshares to 338 million shares.<\/p>\n
The most active stocks in value last week were Gudang Garam
\n(with a total transaction value of Rp 101 billion), followed by
\nHM Sampoerna (Rp 92 billion), Telkom (Rp 79 billion), Great River
\nIndustries (Rp 55 billion), Lippo Life (Rp 44 billion), Indosat
\n(Rp 44 billion), and Astra (Rp 33 billion). (alo)<\/p>",
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