Foreign fund inflow boosts JSX index

Foreign fund inflow boosts JSX index

JAKARTA (JP): Signs of a better Indonesian economy brought an
influx of foreign funds into the Jakarta Stock Exchange (JSX)
last week and propelled its composite index up by 19.4 points
(four percent) to 506.12 from the week's opening of 486.72.

A new deregulation package will likely be announced this
month. It is anticipated that it will be broad-based and will
include the reduction of tariff and non-tariff barriers as well
as measures to improve the efficiency of the local distribution
of goods. The announcement of the lower inflation rate of 0.42
percent for November, compared to 0.64 percent in October, or a
7.85 percent year-to-date rate, was more positive news for the
market.

Sentiment remained bullish as the index crossed the
psychological 500-point barrier to hit the week's high of 502.62
on Thursday.

Two telecommunication companies, Telkom and Indosat, were
actively traded on Wall Street, which pushed the local price for
TelKom to Rp 2,775 on Friday, the highest level since it was
listed.

Citra Marga Nusaphala Persada (CMNP) had strong bids following
the issuance of US$175 million in floating rate notes; the fund
is expected to be used to refinance its revenue sharing bonds.
This will increase the company's earnings per share next year.
Rumors on private placement in the Malaysian market at a price of
Rp 2,300 also boosted the CMNP share price by Rp 400 (21.33
percent) over the week.

Despite worries of poor earnings growth, forestry-related
stocks, like Barito Pacific, Indah Kiat and Tjiwi Kimia, were
among the most actively traded counters.

Meanwhile, concerns about Lippo Bank's solvency and liquidity
issues started to diminish as the bank's financial performance
was considered sound. Lippo Bank shares increased by 21.8 percent
over the past two weeks.

The market is anticipated to move further up this week to
above 510. Active trading is expected because the majority of
investors will soon close for the Christmas and New Year holiday.
Sectors which are expected to be actively traded include
cigarettes, telecommunications, cement, and pulp and paper for
speculative investment.

Local investors started to profit last week, although they
also focused on speculative property and forestry stocks. Active
counters included Telkom, CMNP, Gadjah Tunggal, Barito Pacific,
Indah Kiat, BDNI, Lippo Bank, Enseval, Lippo Land, Tjiwi Kimia,
Dharmala Intiland, Duta Anggada and Darya-Varia.

Foreign-triggered buying was mainly seen on blue-chip counters
like Telkom, Gadjah Tunggal, Indosat, Lippo Bank, Mayora Indah,
Ciputra Development, Astra International, Semen Gresik and Lippo
Land.

Average daily turnover on the regular board increased to 57.4
million shares worth Rp 143.4 billion (US$62.4 million) from 39.7
million shares worth Rp 94.9 billion in the previous week. Total
turnover for the week also increased to 409.8 million shares
valued at Rp 1,120.4 billion from 301.6 million shares valued at
Rp 897.2 billion in the previous week.

Last week's best performers were Modern Photo (up Rp 1,500),
Gudang Garam (up Rp 800), Indorama (up Rp 775), Mulia Industrindo
(up Rp 650) and Aneka Kimia Raya (up Rp 600). The biggest losers
were Sorini (down Rp 500), Ometraco Corp. (down Rp 375), Sucaco,
Multi Bintang and HM Sampoerna (each down Rp 300). Gainers
outnumbered losers by 69 to 66, while 31 counters remained the
same.

-- Sigma Batara