Closer presidential race to weigh on JSX
Closer presidential race to weigh on JSX
JAKARTA (JP): Tightening competition around the country's
presidential race will be a major influence on trading on the
Jakarta Stock Exchange (JSX) this week, according to equity
analysts.
They said over the weekend that a change in the political map
of the presidential battle caused by a sudden turnaround by one
of the major parties would directly weigh on market sentiment.
The presidential race became complicated after the National
Awakening Party (PKB) announced last week that it supported the
presidential nomination of the party's founder, Abdurrahman
Wahid.
The move, as many said, would disadvantage the relative
position of Indonesian Democratic Party of Struggle's (PDI
Perjuangan) Megawati Soekarnoputri who was previously competing
only against incumbent President B.J. Habibie.
One analyst said the high degree of chance that Megawati would
win the presidential election was positively accepted by the
market. "But now it is ruined by Habibie's bigger chance in the
presidential race."
Ario W. Adhhikari, an analyst from PT ABN Amro Asset
Management, said that generally investors were still waiting for
signs that a good government with a good president would be
installed in the country.
"The market wants a positive indication that the country is on
the path toward the formation of a new government led by a
democratic president," Ario said.
"Now Abdurrahman's nomination has somehow created a new
political unpredictability that directly weighs on investors'
mood," another analyst said, adding that the unpredictability
greatly increased market fluctuation.
However, Ario said local investors -- compared to their
foreign counterparts -- were relatively active in the market for
short-term buying and selling, heavily relying on market
sentiment.
Foreign investors, Ario said, were rarely seen trading in the
currently fluctuant market, opting to wait on the sidelines.
"Foreign investors are closely monitoring the market and are
always ready to reenter as soon as a predictable political
situation can be seen," he said, assuring that foreign investors
were not leaving Indonesia.
He said that a stable market would restart with the hunt of a
number of good fundamental stocks by foreign investors, following
the formation of a new government which is accepted by the
people.
"Basically, foreign investors still need to invest in
Indonesia to diversify their portfolio," he said.
Company stocks with good fundamentals are still cheap despite
having booked some gains lately, he added.
He said that foreign investors in Indonesia now had a thin to
zero exposure to the country, thus, they would have to buy back a
lot of stocks from the JSX to readjust.
Ario added that in the meantime any technical analysis for
trading in the currently fluctuant JSX should not count until
normal days are back, hopefully after the Assembly's session.
The JSX Composite Index increased 3.92 percent to 588.23
points last week from 566.04 points in the previous week.
Average daily turnover last week significantly increased to
902.64 million shares, compared to 482 million shares the
previous week.
The average daily transaction value jumped to Rp 677 billion
from Rp 559 billion the previous week, due mainly to active
trading during the last two days of the week.
Last week's top gainers were PT Lippo Enterprises, rising
129.17 percent, PT Panca Overseas Finance, which went up 71.43
percent, and PT Bank Niaga, which ended the week 50 percent
higher.
The losers of the week were PT Super Mitory Utama with a 34.62
percent drop, PT Bank Global Internasional, which took a 22.22
percent tumble, and PT Panin Life, which fell by 18.18 percent in
the week.
The top brokerage firms by transaction value were PT Danareksa
Sekuritas with Rp 420.3 billion, PT Vickers Ballas Tamara with Rp
303.4 billion and PT Merrill Lynch Indonesia, which did Rp 231.8
billion in business.
Meanwhile, the rupiah closed at 7,805 against the U.S. dollar
last week, compared to its 7,970 close the previous week. (udi)