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)