Stock index seen mixed despite positive sentiment<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Despite lingering positive sentiment, the performance of the
\nJakarta Composite Index is expected to be mixed this week due to
\na lack of fresh positive news and the accounting woes of state-
\nowned telecommunications company PT Telkom, an analyst said.<\/p>\n
Budi Ruseno, a stock analyst with Bhakti Capital Indonesia
\nsaid that this week's trading could remain slow in the absence of
\nnew positive news strong enough to lift the index.<\/p>\n
\"We will see an extremely thin market with the index likely to
\nclose at between 498 to 509,\" said Budi.<\/p>\n
The index ended last week 2.69 points lower at 504.09 compared
\nto the previous week's closing of 506.78.<\/p>\n
However, Budi said the index could take advantage of an
\nexpected bullish sentiment over the rupiah, propelled by the
\ninitial public offering (IPO) of giant state-owned Bank Mandiri.<\/p>\n
Mandiri's IPO has reportedly successfully attracted investors,
\nincluding foreign investors, raising the demand for the rupiah
\nfor the purchase of the shares.<\/p>\n
Budi also said the declining trend in Bank Indonesia's
\ninterest rate was also expected to help keep the index above 500.<\/p>\n
The central bank has been steadily cutting its benchmark
\ninterest rate over the past year to encourage banks to lower
\ntheir lending rates so that companies can obtain cheaper loans.<\/p>\n
The interest rate on one-month Bank Indonesia SBI promissory
\nnotes declined to 9.53 percent last week, the lowest since 1998.<\/p>\n
According to Budi, the only obstacle that could impede the
\nindex's performance was the Telkom case.<\/p>\n
Last week, Telkom's executives once again announced that the
\ncompany would not be able to conclude the reaudit of its 2002
\nfinancial report by the July 15 deadline set by the U.S.
\nSecurities & Exchange Commission (SEC).<\/p>\n
The SEC could delist Telkom from the New York Stock Exchange
\nif it fails to comply with the SEC requirements<\/p>\n
PricewaterhouseCoopers is currently re-auditing Telkom's
\nfinancial statements and is set to complete the work within two
\nmonths.<\/p>\n
Meanwhile in the currency market, the rupiah is expected to
\ncontinue its climb this weak, supported by capital inflows from
\ninvestors buying Bank Mandiri shares, a dealer with a local bank
\nsaid.<\/p>\n
\"The fact that the U.S. dollar has been weakening recently in
\nthe region will also add power to the rupiah,\" the dealer said.<\/p>\n
He predicted that the rupiah would maintain its strong
\nposition this week at between Rp 8,160 and Rp 8,210.<\/p>\n
The rupiah finished the week higher at Rp 8,185, up from the
\nprevious week's Rp 8,290.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/stock-index-seen-mixed-despite-positive-sentiment-1447893297",
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"sponsor": "Okusi Associates",
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