Analysts predict stock prices to be firm

Analysts predict stock prices to be firm

JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
are likely to remain firm this week as foreign investors are
expected to stay in the market, though many would prefer to be
more choosy, several analysts said over the weekend.

"I think foreign investors will continue to be net buyers next
week but they might not be as aggressive as this week," a
director of PT Bakrie Securities, Dandossi Matram, told The
Jakarta Post.

Meanwhile, an analyst with a local brokerage, who asked not to
be named, said that the market might be eroded by a consolidation
mood.

The two analysts said the expected consolidation may result
from the fact that many stocks saw a strong price increase last
week on individual issues.

The two analysts shared the view that the JSX composite index
would fluctuate in a narrow range this week due mainly to
selective buying of big caps.

"I do not foresee that foreign investors are in a position to
do either quick buying or selling," Dandossi said.

Commenting on the widespread "takeover" rumor of the country's
largest car maker PT Astra International, they said that
investors are still wondering what actually happened.

They said that the major question concerns the new investors
who have bought Astra's shares on the regular board.

"Someone must have been responsible for the dramatic increase
in Astra's local price," one of the analysts said.

The two analysts added that investors would not likely
concentrate on Astra this week due to a very limited potential
gain.

"There is also speculation in the market that Putera Sampoerna
could have been the most possible single buyer of Astra's
shares," one of the analysts said.

Putera announced that his family and his companies bought
12.66 percent of Astra's shares in the period from June to Sept.
4.

But the announcement failed to clarify the takeover rumor
because other big transactions were executed after that period.

"Market sentiment became more uncertain over the weekend when
timber tycoon Mohammd (Bob) Hasan denied the rumor that he was
looking for a major stake in Astra," he added.

Businessman Prajogo Pangestu also denied market speculation
that he had sold his 10.68 percent stake in Astra.

JSX stock prices edged up 2.6 percent last week with three
stocks from the Lippo Group topping the list of most active
stocks.

The JSX composite index rose 15 points to close the week at
588.34.

Total turnover reached 1.02 billion shares worth Rp 2.4
trillion (US$1.02 billion) against the previous week's figures of
846 million shares, valued at Rp 2.2 trillion.

The value of foreign buy transactions amounted to Rp 910
billion against sell transactions of Rp 863 billion.

The financial firms of the Lippo Group -- Lippo Bank, Lippo
Life and Lippo Securities -- were the most active stocks as the
founder of the three firms started to liquidate his position in
Lippo Life and Lippo Securities to eliminate cross-holding share
ownership.

Roy Tirtadji, a chief executive officer of the Lippo Group,
told journalists last week that the Riady family should liquidate
their position in Lippo Life and Lippo Securities to allow for
the restructuring of the Lippo Group.

Under the restructuring plan, Lippo Life will acquire a 45
percent stake in Lippo Bank and Lippo Securities will purchase 32
percent of Lippo Life.

Lippo Bank booked a trading volume of 174 million worth Rp 575
billion, followed by Lippo Life with 122 million shares valued at
Rp 255 billion and Lippo Securities with 92 million shares worth
Rp 133 billion.

The other six most active stocks in value were Astra (with a
trading value of Rp 132 billion), Duta Pertiwi (Rp 124 billion),
Sampoerna (Rp 89 billion), Telkom (Rp 87 billion), Duta Anggada
(Rp 49 billion), Mulia Industrindo (Rp 48 billion) and Indofood
(Rp 37 billion). (alo)