Stock, rupiah to remain at mercy of regional issues<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The course of the Jakarta stock market this week would depend
\nmainly on sentiment in regional bourses rather than concerns over
\ndomestic political and security conditions, said a securities
\nexpert.<\/p>\n
Stock analyst Hendra Bujang of Mega Access Securities said the
\nlocal stock market had made gains in the last three trading
\nsessions mainly due to a rebound in regional markets.<\/p>\n
\"The index will remain at the mercy of regional sentiment,
\nbecause foreign investors make up about 50 percent of our daily
\ntransactions, making the bourse more vulnerable to any global
\nissues,\" Hendra said on Sunday.<\/p>\n
However, he said sentiment in regional markets were generally
\nweak, overshadowed by lingering negative issues including a
\npossible hike in the U.S. interest rate, economic slowdown in
\nChina and surging oil prices. These factors, plus local political
\nissues in some markets, had sent global markets plunging during
\nthe early part of last week and in previous weeks, also sending
\nthe local stock market on a roller coaster ride.<\/p>\n
\"The chance is 50-50 for the bourse this week to surge higher.
\nI expect the index movement to go for a long range of between 700
\nand 750 this week,\" he said.<\/p>\n
The local index closed slightly higher on Friday at 724.932,
\nup by 2.223 points compared to the previous Friday.<\/p>\n
The average daily volume was 1.58 billion shares worth Rp 1.17
\ntrillion (US$129 million), compared with 1.93 billion at worth Rp
\n1.12 trillion the previous week.<\/p>\n
Regarding political and security concerns over the upcoming
\nJuly 5 presidential election, Hendra said this would not
\nsignificantly affect the index, unless an extraordinary incident
\nsuch as riots, clashes or terrorist attacks occurred.<\/p>\n
Elsewhere, an analyst with a state-owned securities firm said
\na regional issue that could help lift the index was a Saudi
\nArabia proposal to raise its oil output to help stabilize oil
\nprices, which surged last week to a record level of more than $41
\nper barrel.<\/p>\n
Saudi Arabia, OPEC's largest producer, has proposed to raise
\nits output by more than 2 million barrels per day (bpd), or 8.5
\npercent above its existing limits of 23.5 million bpd.<\/p>\n
However, OPEC has yet to approve the plan, and is expected to
\ncome up with the consent during the cartel's official meeting in
\nAmsterdam on June 3.<\/p>\n
Saudi Arabia has submitted its proposal to the Organization of
\nthe Petroleum Exporting Countries (OPEC).<\/p>\n
\"Concerns over the U.S. interest rate hike plan will slightly
\nsubside this week, as it has not materialized yet. Oil price
\nissues will probably rule the regional sentiment this week,\" said
\nthe analyst.<\/p>\n
Analysts have expressed concern that the soaring oil price
\nwill increase production costs of companies and thus push
\ninflation higher, which would threaten the country's hard-gained
\nmacroeconomic stability.<\/p>\n
Meanwhile, the rupiah is projected to remain hovering at
\naround Rp 9,000 against the dollar this week on expected profit-
\ntaking by speculators.<\/p>\n
The rupiah closed slightly lower on Friday at Rp 9,065,
\nagainst Rp 9,040 the previous Friday.<\/p>\n
Bank Indonesia has hinted that rupiah woes may last longer due
\nto global uncertainties, but remained confident the unit would
\neventually stabilize, as economic fundamentals remained strong.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/stock-rupiah-to-remain-at-mercy-of-regional-issues-1447893297",
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"sponsor": "Okusi Associates",
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