Stock index could reach 410 this week: Analyst<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The Jakarta Composite Index should hover above the 400 level
\nthis week amid positive market sentiments and an expected
\nabatement of utility price hike protests, according to an
\nanalyst.<\/p>\n
"The index will be moving back above the 400 level this week
\nwith a good outlook for top stocks. It could even reach 410
\npoints provided there are no 'surprises' that could fuel further
\nstreet protests," Ferry Latuhihin, a stock and currency analyst
\nat Danareksa Securities, said on Sunday.<\/p>\n
As in previous weeks, he added, a rise in the stock index
\nwould come from active trading in blue chips.<\/p>\n
Last week, a rebound in most of the top companies pushed the
\nindex to 401.65 points, 0.5 percent higher than its close the
\nprevious week.<\/p>\n
Street rallies against the recent increase in fuel prices and
\nelectricity and telephone rates are expected to fade after the
\ngovernment decided last week to postpone the phone rate increase,
\nand announced it was considering revising the increase in fuel
\nprices and electricity rates.<\/p>\n
Street protests have become daily occurrences since the
\ngovernment unveiled the simultaneous utility price hikes early in
\nJanuary. There were fears the protests could turn violent,
\ncreating nervousness among stock traders.<\/p>\n
Ferry said the postponement of the phone rate increase would
\nnot damage the financial performance of state-owned
\ntelecommunications company PT Telkom, whose shares were under
\npressure toward the end of last week.<\/p>\n
"It won't have much of a change on the company's financial
\nbalance sheet. Telkom will still be able to perform well, coupled
\nwith the fact that it (the hike) was only delayed, not canceled,"
\nhe said.<\/p>\n
In last week's trade, the daily volume averaged 261.24 million
\nshares worth Rp 299.9 billion (US$33.79 million), compared to
\n242.5 million shares worth Rp 274.2 billion last week.<\/p>\n
In the currency market, a prolonged bearish mood toward the
\nU.S. dollar and strong support from Bank Indonesia will keep the
\nrupiah hovering below the 8,900 level this week, Ferry said.<\/p>\n
"I see no reason for the rupiah to decline; at the least it
\nwill stay at its current level this week, which is stabilizing in
\na narrow range of 8,850-8,900," he said.<\/p>\n
His forecast was based on the recent weakening of the dollar
\nagainst regional currencies, based on concerns over the U.S.
\neconomy and a possible war with Iraq.<\/p>\n
The rupiah ended last week at 8,875 per dollar, slightly
\nstronger than its 8,918 close the week before.<\/p>\n
On the domestic front, the upcoming Jan. 21 and Jan. 22
\nConsultative Group on Indonesia (CGI) meeting could help lift the
\nrupiah.<\/p>\n
The CGI is a grouping of the country's traditional foreign
\nlending countries and institutions, which are expected to provide
\nbetween $2.4 billion and $2.8 billion in fresh loans to Indonesia
\nto help plug the 2003 state budget deficit.<\/p>\n
"The central bank, which has been very supportive of the
\nrupiah, will also be a factor for the local unit's movement,"
\nFerry said, adding that with some $31.4 billion in its
\ninternational reserves, Bank Indonesia is more than capable of
\nguarding the rupiah.<\/p>",
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