Fischer visit to influence JSX this week: Analysts

Fischer visit to influence JSX this week: Analysts

JAKARTA (JP): The outcome of the meeting between the
International Monetary Fund (IMF) executive, Stanley Fischer,
with President Abdurrahman Wahid on Monday will determine the
direction for share trading of the Jakarta Stock Exchange (JSX)
this week, equity analysts said.

"We are anxious to hear how the meeting will turn out. If it
is good, it will be positive for the market," said Lukman Hakim,
the associate director at Ludlow Securities.

Stanley Fischer, the fund's acting managing director, arrived
on Sunday to meet with Abdurrahman and senior economic officials
to review the country's economic programs.

"The main reason for my visit is to reassure President Wahid
of the IMF's support for Indonesia's economic program, and to
review its progress with him," Fischer said in an arrival
statement.

Lukman said the JSX needed to see the Indonesian government
stand up to its commitments as set out in the IMF's letter of
intent, while continuing to implement the necessary economic
reform programs.

There was some negative sentiment in the market as investors
were still worried about the government's ability to meet its
reform measures as agreed on in the government's letter of intent
to the IMF on Jan. 20, Lukman said.

Fischer, however, said the IMF had a more positive view and
that they were encouraged by recent positive developments in the
implementation of the program, including the framework for
corporate debt restructuring and the favorable Paris Club
meeting.

Lukman said the other factor weighing on JSX trading this week
would be investors' speculation on possible U.S. interest rate
hikes as the U.S. government would likely preempt the possible
increase in the inflation rate on the country's strengthening of
consumers' buying power.

The continuing decline of the unemployment rate in the United
States will soon cause workers' wages to go up, thereby creating
upward pressure on inflation in the economic powerhouse, said
another analyst.

"If the United States raised its interest rates, we would have
to do the same to protect the rupiah's value to the greenback,
but, of course, at the risk of hurting the stock market," Lukman
said.

If rupiah interest rates were not raised, the local currency's
value against the dollar would be pressured otherwise, and in
turn would certainly weigh on the JSX to a great extent, Lukman
said.

Currency dealers said the rupiah might breach its important
psychological 8,000 level against the U.S. dollar this week amid
the lack of funds flowing into the country.

"Last week the rupiah weakened against the greenback as local
companies demanded more dollars to pay their maturing offshore
debts this year," said one dealer.

The rupiah dropped last week to Rp 7,965 compared to Rp 7,625
the previous week.

The JSX index dropped 5.5 percent last week to close at 526.39
points, down from 556.78 the previous week. But the daily average
transaction value increased to Rp 458.86 billion last week,
compared to Rp 374.28 billion during the previous week.

The daily average turnover also increased to 533.7 million
shares from 307.4 million shares the previous week.

Last week's top gainers were PT Cipendawa Farm Enterprises,
whose shares were up by 19.23 percent, PT Sekar Laut by 17.65
percent and PT Indocement Tunggal Perkasa by 17.24 percent.

The week's big losers were PT JAPFA, whose shares fell by 45
percent, PT Putra Surya Perkasa by 33.33 percent and PT Sierad
Produce by 28.57 percent.

JSX last week delisted PT Putra Surya Multidana and PT
Fiskaragung Perkasa due to their bankruptcy status as declared by
the court.

Top brokerage firms by transaction value were PT Vickers
Ballas Tamara with Rp 287.97 billion in transactions, PT
Ciptadana Sekuritas with Rp 210.48 billion and PT Danareksa
Sekuritas with Rp 149.56 billion. (udi)