Analysts predict higher stack prices at JSX this week
Analysts predict higher stack prices at JSX this week
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
this week are expected to benefit from the announcement of the
state budget and the continued window dressing activities,
analysts and stockbrokers said over the weekend.
They said the announcement of the state budget by President
Soeharto tomorrow evening would boost the investors sentiment to
enter the market aggressively.
"The main focus this week will be on the state budget which is
to be announced by President Soeharto on Tuesday," Karman
Pamurahardjo of Harita Securities said Friday.
Analysts and stockbrokers said window dressing activities
which had started late last month would continue this week as
some funds managers wanted to make their financial portfolio look
good.
"I think window dressing will still dominantly mark the
trading activities on the stock market this week," said a broker
with Trimegah Securities.
Analysts said the announcement of the state budget and window
dressing would give positive moves on trading activities this
week. But stock trading would still be overshadowed by the
weakening rupiah.
Analysts have been speculating on the size of the budget,
whether it would be larger than last year's budget in rupiah
terms.
Some analysts are expecting to see severe cuts in spending in
the new state budget to cope with the current monetary crisis.
The government said previously that it would make the budget
produce a surplus of at least 1 percent of the country's gross
domestic products.
But later, President Soeharto said that the government would
maintain balanced budget principles in the 1998/1999 budget,
dismissing severe cuts in spending.
Brokers said many local short-term investors were expected to
flock the stock market on Monday, expecting most stocks to rise
after the announcement of the state budget.
They said banking stocks would continue to get some push,
following the government's announcement last week to merge four
state banks into a new healthier bank by mid-1998.
"Banking stocks were among the active stocks last week and
such positive sentiment on banking stock is expected to continue
this week," a stock analyst.
But most analysts agreed that overall market sentiment would
remain weak due to the persistent weakening of the rupiah against
the American dollar on the currency market.
Most analysts said that they were still greatly concerned by
the persistent fall of the rupiah against the greenback.
On the first trading day for 1998, Friday, the rupiah dropped
below the 6,000 barrier on a persistent corporate demand for the
greenback.
Spot rupiah closed the week at 5,850/5,925 to the dollar.
"With the rupiah continue to weaken against the dollar, the
overall mood for the stock prices on the stock market will remain
gloomy," Harita's Karman said.
The JSX Composite index increase 13.48 points higher to 410.01
last week from 396.53 the previous week.
Total average turnover was 488.05 million shares changing
hands on the regular market against 407.37 million shares the
previous week.
Average daily trading value was Rp 417.14 billion (US$69.5
million) last week, compared to Rp 398.63 billion in the previous
week.
Most large cap stocks gained ground last week. State
telecommunications PT Telkom rose by Rp 150 to Rp 3,075, Indosat
by Rp 300 to Rp 10,500, cigarettemaker Sampoerna by Rp 225 to Rp
4,375 and Gudang Garam by Rp 425 Rp 8,800.
Banking stocks also made some gains, with Bank International
Indonesia rising Rp 25 to Rp 350 and Bank Negara Indonesia by Rp
25 to Rp 550. (aly)