Focus on BNI's offering may weaken the JSX
JAKARTA (JP): Several analysts are predicting that the concentration on the forthcoming initial public offering (IPO) of the state-owned Bank Negara Indonesia (BNI) 1946 will cause a weak sentiment on the Jakarta Stock Exchange (JSX) this week.
They, however, viewed that Astra International should be able to outperform the market on the condition that PT Nusa Ampera Bakti (Nusamba) realizes its plan to buy Astra shares this week.
A Nusamba commissioner, Mohamad (Bob) Hasan, said in an exclusive interview with Kompas daily that Nusamba is willing to buy Astra shares currently owned by several state-owned banks' pension funds.
A senior manager with a local brokerage said Saturday that what has been done by Bob Hasan, who recently disclosed his company's aggressive intention to buy Astra shares, is rather strange.
"It's noteworthy that there was no significant price increase after Bob Hasan announced Nusamba's plan two weeks ago. It showed that investors are suspicious of whether or not Bob had bought Astra shares before he made the statement," he noted.
Several stock analysts contacted by The Jakarta Post over the weekend shared the opinion that Bob Hasan's statements, including the latest one, no longer surprise the market because most investors believe that the Astra acquisition rumor which first circulated in early September was true.
"And people know who's behind those businessmen on the rumor," a director of the Japanese-based PT Daiwa Securities, Moto Murata, told the Post,, adding that "the big event is over."
A senior manager from a leading local brokerage, who declined to be identified, said that Bob Hasan's actions are further proof of the market's general opinion that "Astra is a highly politically sensitive stock."
"It means that whoever makes big deals on Astra, including Putera Sampoerna, must have got a `blessing' or green light beforehand," he said.
Commenting on the general market outlook, Murata and Fajar L. Sutardi, the head of PT Sigma Batara's research department, said that investors are currently preparing for BNI's upcoming IPO, so the market will be weak, just as happened last year when the state-owned PT Telkom went public.
"There is a good reason for investors to be quiet. So, I think we will have to wait until the IPO is completed to see a more active market," Murata said.
Murata said that many investors sold shares just to make sure that they had cash to buy BNI shares.
"I also expect a similar phenomenon to happen as investors buy state-owned firms' shares on the secondary market," he added.
BNI will offer one billion shares on the primary market from Nov. 6 to Nov. 9.
Meanwhile, Fajar said that the expected stagnant performance on the JSX is also based on a general assumption that the market's current level is fair.
"No wonder, the composite index is likely to move in a very narrow range this week," Fajar said.
He noted that in line with the concentration on BNI, investors will become more short-term oriented.
He also predicted that BNI's IPO may be priced at Rp 850 (36 U.S. cents) per share or at a range between Rp 750 and Rp 950, with the assumption that the price will represent a price-earning ratio of eight.
He added that the 22 banking stocks listed on the JSX are currently traded at an average price earning ratio of ten.
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The JSX composite index closed one point lower last week at 570.20 points after hitting a midweek low of 565.78.
Data from the JSX show that during the week, 550 million shares changed hands with a total value of Rp 1.2 trillion.
Foreign buy transactions' value stood at Rp 618 billion against sell transaction's totaling of Rp 628 billion.
Astra was recorded as the most active stock with a total trading value of Rp 117 billion.
Property firm Bhuwanatala Indah Permai, controlled by businessmen Bambang Trihatmodjo and Johanes Kotjo, came second with a trading value Rp 96 billion on the rumor that it was now preparing a strategic alliance.
Local speculative buying pushed up Bhuwanathala's share price by 33 percent during the week to close at Rp 1,700.
Other active stocks in value were Matahari (with a trading value of Rp 76 billion), Berlian Laju Tenker (Rp 68 billion), HM Sampoerna (Rp 66 billion), Bank Niaga (Rp 62 billion), Telkom (Rp 58 billion), Indosat (Rp 38 billion), Mulia Industrindo (Rp 35 billion) and BDNI (Rp 29 billion). (alo)