Bearish sentiment on JSX prevail in 2nd week of June

Bearish sentiment on JSX prevail in 2nd week of June

By Sigma Batara

JAKARTA (JP): Bearish sentiments continued throughout the second week of June. The JSX (Jakarta Stock Exchange) Composite Index lost 3.68 points from the previous week to close at 483.05.

It seemed many overseas fund managers started their holidays, resulting in a lack of foreign presence in the market. This prompted short-term buying and profit taking among local investors.

Macroeconomics factors which will keep the market sidelined is the fear of another hike in the short-term U.S. interest rate.

Trading remained selective with rises in stock prices being mainly rumor-driven. Positive first-quarter corporate earning results did not seem to stimulate market activities.

Overall, we expect the market to move sideways over the next two months. Fundamentally healthy, second-half earnings should give a more certain profit outlook for the end of the year and should reinvigorate trading activities.

Average daily turnover on the regular board decreased to 6.49 million shares worth Rp 25.99 billion (US$12.05 million) last week from 8.60 million shares worth Rp 39.24 billion ($18.20 million) the week before. Total turnover for the week also decreased to 63.64 million shares valued at Rp 252.95 billion ($117.27 million) from 78.02 million shares valued at Rp 354.13 billion ($164.25 million).

Trading by foreign investors was slow although some bargain hunting was seen the market, as foreign investors took advantage of stocks offering attractive price earning ratios (PER). Counters targeted by foreign investors include Mayora Indah, Gudang Garam, Mulia Industrindo, Hero Supermarket, Smart, UIC, Indah Kiat Corporation, Voksel, Ciputra Development, Great River, Gadjah Tunggal and Multipolar.

Meanwhile, domestic investors were reluctant to enter the market and seemed to be repositioning themselves for the up- coming public offerings in early July, such as Modern Bank, Bank Rama and the taxi company Steady Safe. However, speculative play was active on counters such as Barito Pacific Timber, Japfa Comfeed, Tjilatjap Pelletizing, BDNI, Mas Murni, Surabaya Agung, Inco, Dharmala Intiland, Super Mitory, Multipolar and Gadjah Surya.

The four bonus issues listed last week were Inter Delta's one- for-five dividend stocks, Kalbe Farma's seven-for-10 bonus issue and three-for-10 dividend stocks, Matahari Putra Prima's two-for- one and Sona Topas' one-for-five bonus issues. Lippo Life's three-for-one rights issue was also listed last week at an offering price of Rp 2,800.

Among last week's best performers were Bakrie & Brothers (up Rp 1,175), Metrodata Electronic and Schering Plough (both up Rp 1,000 each), Voksel Electric (up Rp 550), Sari Husada and Unilever (up Rp 500 each). The biggest losers were Lippo Life (down Rp 3,300), Marein (down Rp 2,150), Merck (down Rp 900), Astra Graphia (down Rp 500) and Indocement (down Rp 400). Losers outnumbered gainers by 67 to 44, while 19 remained unchanged.