Downward trend likely to continue on JSX
JAKARTA (JP): The prospect of share trading on the Jakarta Stock Exchange (JSX) is likely to remain bleak this week as most investors remain cautious.
"The downward trend in share prices is likely to continue," a securities analyst said over the weekend.
Securities analysts said foreign investors would remain on the sidelines as they still feared clashes similar to the ones last week -- in the election campaigns of the ruling Golkar, the Moslem-based United Development Party (PPP) and the Indonesian Democratic Party (PDI) -- could worsen.
Analysts say local investors could take advantage of the absence of foreign investors to buy undervalued shares especially those of medium-sized companies.
"Local speculative buying on mid size stocks will mark trading activities this week," Edwin Syahruzad, an analyst from Amsteel Securities Indonesia told The Jakarta Post.
Brokers agreed saying trading would still be dominated by shares of companies in the new Morgan Stanley Capital International (MSCI) index.
Among second line stocks in the index are Budi Acid Jaya, Fiskar Agung, Sierad Produce, Darya Varia Laboratoria, Daya Guna Samudera, Tambang Timah.
Edwin said the absence good news from the local government coupled with the heated political situation during the campaign discouraged foreign investors.
PPP and Golkar supporters reportedly clashed in several places in Central Java, leaving scores injured.
About 100 supporters of the Moslem-led PPP returning from a party campaign rally in Kajen, southwest of Pekalongan in Central Java, were attacked by a mob in front of a Golkar office Friday.
Most business centers, shopping complexes, gas stations and important public places are closely guarded.
Early last week, PPP's supporters boycotted the campaign to protest an attack by Golkar on two of its offices.
In Ujung Pandang, South Sulawesi, many PDI's supporters were being intimidated by Golkar supporters.
"The political atmosphere during the first week of the campaign was not that bad but if more incidents occur this week, it will be very bad for stock trading," an analyst said.
Analysts and dealers said that although fears of a further increase in U.S. interest rates declined as U.S. economic data cooled expectations of another interest rate increase at the next Federal Open Market Committee (FOMC) meeting, foreign investors would sideline.
The JSX composite index fell by 2.93 points to 647.89 points last week from 650.82 in the previous week.
Daily average transaction volume, however, increased to 292.2 million shares last week compared to 217.1 million in the previous week.
Daily average transaction value rose to Rp 397.44 billion (US$222.5 million) last week against Rp 397.44 billion in the previous week.
"Investors are still following the developments in the election campaign but are not too worried about it," a dealer said over the weekend.
Most second line stocks included in MSCI index rose last week.
Budi Acid Jaya rose by Rp 100 to close at Rp 3,100, Fiskar Agung by Rp 125 to Rp 1,875, Sierad produce by Rp 2 to RP 825, Daya guna Samudera by Rp 275 to RP 3,725, and tambang Timah by Rp 325 to Rp 3925.
Blue chips closed mixed last week.
Cigarette maker HM Sampoerna rose by Rp 175 to close at Rp 9,600 while competitor Gudang Garam shed by Rp 350 to Rp 9,650, Telkom was down Rp 150 to Rp 3,450, Indosat was up Rp 75 to Rp 6,775 and Bank Negara Indonesia went up by Rp 75 to close at Rp 1,450. (09)