Stock index likely to keep rising<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Jakarta stock market index, which increased 3.3 percent
\nlast week, is predicted to continue its upward charge this week,
\ncashing in on favorable economic sentiments.<\/p>\n
Extending the current rally are conducive prospects for
\neconomic growth, following on an upbeat Central Statistics Agency
\n(BPS) report on economic growth, and announcements of companies'
\nthird-quarter earnings, stock analysts said.<\/p>\n
The Jakarta Stock Exchange composite index last week closed at
\nall time high of 965.22 points, a 3.3 percent increase from
\nprevious week's closing, with daily volume averaging 2.11 billion
\nshares worth Rp 1.7 trillion (US$187.7 million).<\/p>\n
\"I think the (upward) trend will continue, although perhaps
\nnot as high as 3 percent like last week,\" Dodi Prawira of Bapindo
\nSekuritas told The Jakarta Post on Sunday, citing better growth
\nprospects for the economy.<\/p>\n
The country's gross domestic product grew faster at 5.03
\npercent in the third quarter of the year compared to the same
\nperiod in 2003, BPS reported on Friday, signaling the economy's
\npotential to exceed the government full-year growth target of 4.8
\npercent.<\/p>\n
Echoing Dodi's sentiments is Lorensius Chrisbiantoro of BCI
\nSecurities. \"Technically, the trend for next week should remain
\nupward as the overall macroeconomy continues to improve,\"
\nLorensius told AFP over the weekend.<\/p>\n
Earlier this month, the World Bank also revised its forecast
\nfor this year's growth from 4.5 percent to 4.9 percent as a
\nresult of, among others factors, strong domestic consumption, and
\nsigns of investment recovery in the first semester, as well as a
\npeaceful general election.<\/p>\n
The economic outlook has been also supported by the dollar's
\nslide against most other currencies, which could in turn keep
\ninflationary pressure at home in check and provide room for the
\ncentral bank to continue to maintain a low interest rate
\nenvironment.<\/p>\n
\"However, there are shares that have already reached their
\nfair value and thus there is little chance of sharp increases (in
\nshare prices), such as (telecommunication giants) Telkom and
\nIndosat shares.<\/p>\n
\"That's why I think the increase in the index this week will
\nbe less than 3 percent,\" Dodi said.<\/p>\n
Both Dodi and Lorensius agreed that investors, including deep-
\npocketed foreigners who have been the driving force behind the
\nindex's rise in the past weeks, are now aiming to break the
\n1,000-point benchmark before the end of the year.<\/p>\n
According to data from the Jakarta Stock Exchange, foreign
\ninvestors became net-buyers last week for the fifth straight
\nweek.<\/p>\n
A net Rp 7.28 billion worth of shares was bought by overseas
\ninvestors, a sharp increase when compared with Rp 1.71 trillion
\nthe week before, it said.<\/p>\n
Last week's robust performance extended the solid showing in
\nthe previous month, which according to a survey from
\ndollarDEX.com, 6.1 percent raise in October made the country the
\nbest market performer in Asia.<\/p>\n
Among others, shares of top banks would be the most-sought
\nstocks and will be the engine to driving the index up, Dodi said.<\/p>\n
\"Banking shares, such as Bank Niaga, Mandiri, and perhaps BRI
\nhave a good chance of increasing,\" he added.<\/p>",
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