Dormant trading seen at JSX due to lack of stimulus

Dormant trading seen at JSX due to lack of stimulus

JAKARTA (JP): Sluggish trading is expected on the Jakarta
Stock Exchange (JSX) because there are no fresh incentives
expected to be able to attract investors, equity analysts said
over the weekend.

They said the bullish trend in the sales of blue chip shares
had declined by the end of trading last week and was expected to
further weaken this week due to lack of trading incentives, such
as positive reports on corporate activities and government
economic policy.

"Economic fundamentals remain good, but that is not enough.
The market needs some good news to maintain its bullish trend,"
one of the analysts said.

He was optimistic, however, there would be no major pullout
from the market either, because it would receive no significant
negative news.

He acknowledged that the setback to the resolution of the Bank
Bali scandal involving a number of former senior government
officials would have a negative influence on the market. "But the
impact will not be that big," he added.

Most of the analysts were in agreement that this week's
trading would be mostly dictated by the volatility of the global
stock exchanges, especially Taiwan's.

"The market will continue to be influenced by volatile
overseas stock exchanges. It will not be exciting next week," he
said over the week end.

The financial market in Taiwan is expected to go into free
fall due to investor uncertainty following the election of
proindependence figure Chen Shui-bian as president.

The analysts believed that the Taiwan uncertainty would also
affect regional markets, which for several weeks had been
inconsistent due to different perceptions of the U.S. economy's
future.

An analyst from a foreign securities firm agreed that the U.S.
market would still have a significant impact on the regional
markets, including the JSX.

Yuzar Nazaruddin from Ficor Securities expected blue chip
shares to bring up the Composite Index this week, despite the
relatively gloomy outlook.

He agreed the effects of the volatile regional markets could
still be seen on the JSX, but the positive response toward the
Capital Market Supervisory Agency's (Bapepam) recent move to
protect the investing public would still be able trigger the
trading of some good shares.

Bapepam last week issued new regulations, one of which
requires that a listed company have at least one independent
director.

An independent director usually has a much greater commitment
to working for the company, and not only for its majority
shareholders.

The JSX Composite Index surged 8.7 percent last week to close
at 596.18 points, up from 548.55 the previous week. Whereas the
daily average transaction value increased to Rp 992.52 billion,
compared to Rp 703.11 billion the previous week.

The JSX Composite Index decreased about one percent to close
at 590.85 points, down from 596.18 points the previous week.

Daily average transaction values dropped to Rp 612.09 billion
last week, compared to Rp 992.52 billion the previous week.

The daily average turnover was also down to 425.2 million
shares, from 697.6 million shares the previous week.

Last week's top gainers were PT Indo Citra Finance, whose
shares jumped 35.71 percent, PT Sarasa Nugraha by 33.33 percent
and PT Concord Benefit Enterprises by 27.27 percent.

The week's big losers were PT Van Der Horst Indonesia, whose
shares fell by 51.79 percent, PT Primarindo Asia Infrastructure
and PT Keramika Indonesia (both down by 25 percent).

The top brokerage firms by transaction value were PT Bhakti
Investama with Rp 262.96 billion in transactions, PT Vickers
Ballas Tamara with Rp 229.05 billion and PT GK Goh Ometraco with
Rp 211.16 billion.

The rupiah closed the week weaker at 7,435 against the U.S.
dollar, compared to 7,380 the previous week. (udi)