East Timor, Bank Bali to weigh on the bourse

East Timor, Bank Bali to weigh on the bourse

By Wachyudi Soeriaatmadja

JAKARTA (JP): Developments in the Bank Bali scandal and
conditions in East Timor will continue to dictate the direction
of trade on the Jakarta Stock Exchange (JSX), securities analysts
said.

An analyst from PT Istethmar Finas Securities, Lukman Hakim,
said over the weekend the market would be effected by the
reception received by the United Nations multinational
peacekeeping force scheduled to arrive in East Timor early in the
week.

"An early indication that the UN multinational force will
succeed in its mission to restore peace in East Timor is needed
for the stability of the local stock market," he said.

Hundreds of people have been killed and thousands have fled
East Timor as a result of violence by prointegration militias
allegedly backed by the Indonesian Military. The violence
escalated after the results of the Aug. 30 ballot were announced,
revealing a majority of East Timorese rejected autonomy within
Indonesia.

Lukman believed trading on the stock market would remain flat
because a resolution to the Bank Bali scandal remained uncertain,
and it was unknown how the peacekeeping force would be received.

Dodi Prawira of PT Bapindo Bumi Sekuritas said the JSX index,
which closed at 547.01 last week, could drop below 525 in the
coming week.

"The index, however, will not breach the 500 level unless
there is a new conflict following the arrival of the
multinational force in East Timor," he said.

He also said the JSX would see an average daily transaction
value of Rp 450 billion or below compared to Rp 501 billion the
previous week.

Investors will stand back and see how the situation in East
Timor develops, he said.

"Both sellers and buyers will just wait to enter the market,"
he said.

Investors believe selling stocks now risks losing the
opportunity of a possible market rebound in the near future, he
added.

He suggested investors focus on blue chips this week because
these shares were more reliable during periods of volatility such
as we are currently experiencing.

Lukman and Dodi also shared the view that the JSX would
continue to bear the pressure of the unresolved banking scandal
involving a questionable transfer of US$80 million from Bank Bali
to a private firm linked to President B.J. Habibie's inner
circle.

According to reports, the Bank Bali scandal has led to the
International Monetary Fund (IMF) delaying its next loan
disbursement to Indonesia.

The reports said the IMF postponed its review of the country's
economic programs, automatically delaying the next loan
disbursement.

The IMF was scheduled to review the economic programs in the
middle of this month, which was to be followed by a $460 million
aid disbursement in October.

Stock analysts, however, said the suspension of loans was
necessarily temporary, because the IMF had too a large stake in
the country's economy to allow it to fail.

The IMF is organizing a $46 billion bailout of the country's
economy, of which the fund contributed some $12.3 billion. More
than $10 billion of this money has been disbursed.

The JSX Composite Index fell 2.8 percent to 547.01 points last
week from 562.77 points the previous week.

Daily average turnover last week was some 355 million shares,
compared to 495 million the previous week.

Also on the decline was daily average transaction value,
falling to Rp 501 billion from Rp 672 billion the previous week.

Last week's top gainers were PT Pool Asuransi Indonesia,
rising 66.67 percent, PT Surya Semesta Internusa, which went up
41.67 percent, and PT Indospring, which ended the week 34.62
percent higher.

The top losers of the week were PT Sekar Laut with a 54.55
percent drop, PT Pudjiadi & Sons Estate, which took a 42.50
percent tumble, and PT Alumindo Light Metal, which fell by 23.64
percent on the week.

The top brokerage firms by transaction value were PT Syahrir
Securities with Rp 527.7 billion, PT Vickers Ballas Tamara with
Rp 414.1 billion and PT Credit Lyonnais Indonesia, which did Rp
249.2 billion in business.

Meanwhile, the rupiah closed at 8,230 against the U.S. dollar
last week, an improvement over its 8,275 close the previous week.