Local stocks expected to lose steam this week<\/p>\n
JAKARTA (JP): Share prices in the local market are expected to
\nlose steam this week due to the absence of a foreign funds inflow
\ninto the local bourse and lingering fears over the country's
\npolitical and social environment, analysts said.<\/p>\n
They said that the massive foreign funds inflow, which allowed
\nthe local benchmark price index to break through the 400-point
\nkey level to 428.98 on Monday, would soon quit the hammered local
\nbourse.<\/p>\n
\"Foreign investors are no longer tempted to enter the local
\nbourse because of the political instability at home,\" Adrian
\nRusmana, head of research of BNI Securities said on Saturday.<\/p>\n
Securities analysts said that fears that antigovernment
\ndemonstrations, which have taken place almost daily for the past
\nfew weeks, would turn violent, turned back foreign investors to
\ntheir home bases.<\/p>\n
\"Investors fear that such demonstrations will turn violent,\"
\nanother analyst said.<\/p>\n
Vonny Juwono, a broker with Trimegah Securindolestri said that
\nmost foreign and local investors, which had placed massive buying
\norders on certain blue chip stocks the previous week, would stay
\naway from the local market after cashing in profits on their
\ngains the previous weeks.<\/p>\n
\"Profit-taking will likely mark the trading activities in the
\nlocal bourse,\" she said.<\/p>\n
But head of research of Sigma Batara Fadjar Limin Sutandi
\nsaid, that despite massive profit taking, the benchmark price
\nindex in the local market would probably hover around the key
\n400-point level for the whole week.<\/p>\n
\"Though profit will mark trading activities, the index will
\nresist at the 400 level,\" he said.<\/p>\n
Trimegah's Juwono said, however, the direction of the stock
\nprices in the local market would largely depend on the movement
\nof the other equity markets in the region as there were no fresh
\nleads at home which would influence foreign investor sentiment.<\/p>\n
Securities analysts said that the release of the first nine-
\nmonth financial reports of local corporations this week would not
\nbecome a meaningful guide to company prospects as most of them
\nwere struggling to cope with an economic slump and huge foreign
\nexchange losses.<\/p>\n
BNI's Adrian said that companies serving the domestic market
\nand with substantial offshore borrowings had been hammered by the
\neconomic decline at home and have seen their foreign exchange
\nlosses rocket following the rupiah's sharp depreciation against
\nthe American dollar.<\/p>\n
Adrian predicted that stocks of corporations with huge
\noffshore borrowings would became the speculative buying target
\nthis week to benefit from a stable rupiah-dollar exchange rate.<\/p>\n
\"With a relatively stable rupiah, stocks of companies with
\nsubstantial foreign borrowing will be the main target of
\nspeculative buying,\" he said citing car maker Astra International
\nas an example.<\/p>\n
While the Jakarta Stock Exchange's (JSX) main composite index
\nfell 2.8 percent (11.33 points) to 392.32 last week compared to
\n403.65 the previous week.<\/p>\n
Daily average turnover, however, soared to 469.17 million
\nshares changing hands last week compared to 380 million shares
\nthe previous week.<\/p>\n
Daily average transaction value also rose to Rp 447.324
\nbillion last week compared to Rp 346.32 billion the previous
\nweek.<\/p>\n
Meanwhile, currency dealers said that the rupiah, which closed
\nat 7,450 on Friday last week compared to its close at 7,500 the
\nprevious week, was expected to advance further to the 7,000 level
\nagainst the American dollar this week.<\/p>\n
The rupiah, which has strengthened significantly from between
\nRp 10,000 and 11,000 per dollar two months ago despite the
\npolitical uncertainty, would remain steady this week.<\/p>\n
\"Possible intervention by the central bank could pave the way
\nfor the currency to hit the 7,000,\" a chief dealer with a joint
\nventure bank said. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/local-stocks-expected-to-lose-steam-this-week-1447893297",
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