Profit taking predicted to dominate Jakarta shares<\/p>\n
JAKARTA (JP): The rupiah is likely to remain steady this week
\nbut local share prices are expected to bounce off their highs on
\nprofit taking following last week's strong gains, analysts said
\nover the weekend.<\/p>\n
They said market sentiment would likely remain good this week
\nas international money would start flowing in, which would
\npossibly give a boost to the beleaguered rupiah.<\/p>\n
Currency dealers said the rupiah could strengthen further if
\nstate banks continued to support the currency like they did last
\nweek.<\/p>\n
A dealer with a local private bank said if the rupiah shot to
\nthe 12,000 level against the U.S. dollar this week and stayed at
\nthere for a while, it would indicate stability and the tendency
\nwould be for the currency to strengthen, possibly to 10,000 over
\nthe next few weeks.<\/p>\n
"But if the rupiah weakens again to the 14,000 level, it would
\nshow that the strengthening of the rupiah these past few days was
\nonly technical, that is due to intervention, and it would be
\ndifficult to bring it even to the 12,000 level in the short run,
\nunless the government intervenes in the market again."<\/p>\n
The rupiah closed last week at 13,350 to the dollar, or some
\n9.5 percent stronger than the Rp 14,700 to the dollar the week
\nbefore.<\/p>\n
Nevertheless, dealers said, the movement of the Japanese yen
\nand regional currencies would also affect the fate of the rupiah,
\nwhich had suffered the largest depreciation among regional
\ncurrencies.<\/p>\n
Technically, however, the rupiah should stay relatively strong
\nbecause, unlike previous weeks, local banks have become dollars
\nsellers as the central bank has promised to back them up any time
\nthey need foreign exchange, he said.<\/p>\n
Previously, domestic banks in search of U.S. dollar funding
\nwere forced to buy the greenback on the spot market due to a lack
\nof credit lines to offshore banks.<\/p>\n
In addition, they said, the market in general was anticipating
\nthe strengthening of the rupiah because of more incoming foreign
\naid.<\/p>\n
The disbursement of foreign loans, however, will not stimulate
\nfirm buying on the Jakarta Stock Exchange (JSX) because the
\nmarket recorded too many big gains during the last two weeks,
\nanalysts said.<\/p>\n
The JSX Composite Index closed last week 4.9 percent, or
\n22.654 points, higher at 486.234 over the week.<\/p>\n
Daily turnover for the week averaged 402.62 million shares
\nworth $33.94 million, compared to the average of 255.25 million
\nshares valued at $22.8 million the previous week.<\/p>\n
Socgen-Crosby Indonesia' head of research Goei Siauw Hong
\npredicted that the market would make a slight rally in the
\nbeginning of the week but then would start to decline.<\/p>\n
"So much good news has come in and the market will still be
\nhappy in the beginning of the week before a correction sets in,"
\nHong said.<\/p>\n
Stimulus<\/p>\n
He said the market was now waiting for real economic stimulus
\nfrom the government to stop the contraction in production and
\nrevive economic activities.<\/p>\n
"The market is looking forward to real economic policies, not
\nonly social safety net programs," he said.<\/p>\n
Bahana Securities' associate director and head of equity sales
\nAndre Cita agreed that profit taking would rule the market this
\nweek.<\/p>\n
However, Cita predicted that foreign investors would continue
\nbuying after a relatively long pause following massive rioting in
\nJakarta and other cities in May.<\/p>\n
"I would expect the market to have few points here and there
\nof some profit taking, But I would also expect to see some more
\nforeign participation," he said.<\/p>\n
He noted that some stocks, especially of those dollar earners,
\nwould seem relatively cheap in dollar terms, compared to their
\nprecrisis prices.<\/p>\n
"So they would have to be very, very attractive in this point
\nof time to some foreign investors."<\/p>\n
He said a stable rupiah, a stable social situation and, more
\nimportantly, privatizations would continue to influence the
\ndirection of the market in the near term.<\/p>\n
Vickers Ballas Tamara' head of research Noraya Soewarno said
\nthe issue of privatization of listed state banks would always
\nspark some speculative interest among domestic investors.<\/p>\n
"If more positive news about the privatization of state firms
\nis coming, I expect more buying on those stocks will set in," she
\nsaid.<\/p>\n
State cementmaker PT Semen Gresik and state mining firm PT
\nAneka Tambang became the targets of speculative buying during the
\nlast few weeks due to the government's privatization plans for
\nthe firms.<\/p>\n
Semen Gresik gained Rp 750 to close last week at Rp 12,050
\nfrom the previous week's close of Rp 11,300. Aneka Tambang rose
\nRp 425 to Rp 2,475 from Rp 2,050.<\/p>\n
Heavyweight state telephone monopoly PT Telkom closed trade
\nlast week at Rp 4,625, compared to the previous week's close of
\nRp 4,350. State-owned satellite operator PT Indosat closed at Rp
\n16,200, compared to the previous week's high of Rp 17,800.<\/p>\n
Cigarette giant PT Gudang Garam closed the week at Rp 8,400
\nfrom the previous week's close of Rp 8,450. Competitor PT HM
\nSampoerna gained Rp 125 to Rp 2,625, compared to the previous
\nweek's close of 2,275. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/profit-taking-predicted-to-dominate-jakarta-shares-1447893297",
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