Student demos cast a shadow over JSX<\/p>\n
JAKARTA (JP): Fears of escalating student demonstrations and
\nreports of looting will continue to cast a shadow on the
\ncountry's financial market this week.<\/p>\n
Securities analysts said on Friday that such fears would
\ndampen positive sentiment arising from the latest letter of
\nintent signed by the government and the International Monetary
\nFunds.<\/p>\n
They said that the agreement, which would allow Indonesia to
\nreceive another $1 billion tranche from the IMF, should have
\nimproved the market sentiment because with the additional fund,
\nthe central bank would have stronger reserves to stabilize the
\nailing rupiah.<\/p>\n
\"But at a time when the political situation is not so
\nencouraging, such a positive factor will not have an impact on
\nthe market. Fears of unrest will remain the dominant factor,\"
\nhead of research of BNI Securities Adrian Lesmana told The
\nJakarta Post.<\/p>\n
He said that trading activities in the ravaged local market
\nwere no longer based on the fundamental factors of the companies
\nbut rather on social and political situation at home.<\/p>\n
\"The ups and downs of stock prices in the local market are
\ndetermined by political and social uncertainties,\" he said. A
\nseries of student demonstrations hit Jakarta and Surbaya last
\nweek demanding President B.J. Habibie resign for failing to halt
\nskyrocketing prices.<\/p>\n
Stockbrokers said that the absence of fresh leads, coupled
\nwith first-half devastating financial reports of most companies,
\nwould force most investors to shun Indonesia's market.<\/p>\n
\"I think most foreign fund managers no longer list Indonesia's
\nmarket as an investment spot for foreign investors due to the
\npolitical uncertainty here,\" said head of institutional sales of
\nMashill Jaya Securities Antonio Yongnata.<\/p>\n
Associate director of state-owned securities house Bahana
\nSecurities, Andre Cita, agreed, saying that improving political
\nand social instability at home has become a prerequisite for the
\ngovernment to attract foreign funds.<\/p>\n
Gloomy<\/p>\n
Though the local market remained gloomy in the short term and
\nlong term, BNI's Adrian said that certain stocks, especially
\nresources and mining based ones were still worth picking as most
\nof them generate their revenue in dollars.<\/p>\n
\"But avoid picking up retail stocks which are sensitive to
\nriots,\" he said, pointing out that shops and buildings of
\nMatahari, Ramayana and Hero were the main looting targets of
\nangry mobs in the aftermath May riots, which brought down former
\npresident Soeharto.<\/p>\n
But Mashill's Antonio did not agree with Adrian, saying that
\nmost investors in the local market are short-term oriented who
\nbase their trading heavily on market sentiment.<\/p>\n
\"There are no more long-term investors here,\" he said.<\/p>\n
Currency dealers also shared stock analysts' view, saying that
\nthe local foreign exchange market would largely rely on the
\ndevelopment of the political situation at home.<\/p>\n
They said that the rupiah, which closed at 11,650 on Friday
\nlast week against 10,850 the previous week, was expected to trade
\nbetween 11,800 and 12,000 levels this week.<\/p>\n
\"The direction of the rupiah has been directed by the
\npolitical situation,\" Robert Z. Toruan, a dealer with Bank Niaga
\nsaid on Friday.<\/p>\n
He said that the rupiah might nosedive further to above the
\n12,000 level this week as demand by local companies and banks to
\nsettle their foreign obligations would increase later this month
\nand fears of a possible social outbreak might occur again.<\/p>\n
The JSX Composite Index fell 1.51 points to 324.04 last week
\nfrom its close at 325.55 the previous week.<\/p>\n
Daily average turnover, however, fell to 182.50 million shares
\nchanging hands last week compared 270.82 million shares the
\nprevious week.<\/p>\n
The daily average transaction value, however, remained almost
\nunchanged at Rp 248.15 billion last week compared to Rp 248.11
\nbillion the previous week. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/student-demos-cast-a-shadow-over-jsx-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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