Gus Dur's written apology positive for JSX: Analysts
Gus Dur's written apology positive for JSX: Analysts
JAKARTA (JP): Equity analysts believe President Abdurrahman Wahid's apology to the House of Representatives last Friday may boost the stock market in the coming week.
However, how the legislators respond to the President's apology will have a major impact on the market during the course of the week, they added.
"If the main two political parties -- Golkar and the Indonesian Democratic Party of Struggle -- accept Gus Dur's apology, the market will certainly be positive," said Budi Ruseno from Bhakti Investama, referring to the President by his nickname.
Last Friday, a day after defiantly dismissing the House's right to question him about the controversial dismissal of two of his Cabinet ministers, Abdurrahman delivered a written apology to the House in a bid to ease the tension between himself and legislators.
Budi said the JSX Composite Index would improve slightly in the beginning of the week because the market perceived the President's written apology positively.
Trading for the rest of the week will very much be dictated by the House members' response to the apology, he said.
Budi said the Composite Index would most likely be range-bound this week, moving between the 500 and 520 point level.
Echoing Budi's comments, an analyst from a joint-venture securities house said the market would move sideways this week, as investors saw some political uncertainty ahead of the General Session of the People's Consultative Assembly, scheduled for early August.
"Those people in the legislature keep saying nothing too serious (will take place at the session), no impeachment of Gus Dur, but at the same time they might be involved in some back- room political maneuvering," the analyst said.
He said persistent moves to undermine the President's political position ahead of the Assembly's annual session would continue.
"The more it becomes known to the public the more the stock market will suffer," he added.
Trading on the rupiah is expected to follow much the same pattern of the stock exchange. According to currency dealers, the rupiah will be somewhat more affected by political developments following the President's meeting with the House last week.
A dealer with a foreign bank said the central bank intervened moderately to prop up the rupiah last week, buying rupiah or selling dollars on the market.
He also said the central bank was fighting vigorously to foil currency speculators in the local market by placing their officials in the offices of a number of foreign banks.
"The central bank now wants to see the list of the top 50 currency trading customers (by trading value) of our bank as part of their active campaign against speculators ahead of the August political event," he said.
The rupiah strengthened last week to 8,935 against the U.S. dollar, compared to the previous week's close of 9,473.
The JSX Composite Index increased slightly last week, closing at 508.79 points from 504.11 points the previous week.
The daily average transaction value last week remained unchanged from the previous week at Rp 300 billion.
The daily average turnover, however, decreased to some 421 million shares from 470 million shares the previous week. (udi)