`Index to hover above 400 points'

`Index to hover above 400 points'

Dadan Wijaksana, The Jakarta Post, Jakarta

While the gloomy sentiment resulting from the U.S.-Iraq
standoff will likely continue to cloud the local stock market,
some corporate actions are expected to drive the Jakarta
Composite Index up slightly this week to hover above 400 points,
an analyst said.

Jeffry Irawan of a Jakarta-based securities firm said on
Sunday that the market would likely see several blue chip
companies issue encouraging full-year financial reports, a move
which could lead to a slight increase in the index.

"The market anticipates the reports to be promising. This will
be enough to push the index up, although continued concerns over
the situation in Iraq will limit the progress," Jeffry said.

Albeit limited, he added, the positive news, coupled with the
fact that most of the market's top shares were relatively cheap,
would enable the index to move near 405 points.

Last week, the index closed at 399.22 points, which was down
about 0.75 percent from the previous week's closing at 402.24.
The daily volume averaged 205.66 million shares, worth Rp 154.65
billion (US$17.4 million), compared to the average of 202.68
million shares traded the previous week with a value of Rp 201.5
billion.

The market will be closed on Monday in observance of the
Islamic New Year.

Jeffry said that the financial reports were expected to be
positive as the overall economy last year proved to have fared
better than expected.

"But still, the main movers of the market will depend on the
much-anticipated latest progress in Iraq," he warned.

The standoff between Iraq and the U.S. with its close allies
has been hurting markets all over the world, creating jitters
over the prospects of the global economy should a war break out.

The Jakarta market has been no exception, as fears of war have
put the index, which previously was on the rise, under heavy
pressure over the past few weeks.

The absence of fresh leads from the domestic front has also
played a part in the index's depressed performance, he said.

In the currency market this week, the rupiah will maintain its
weeks of steady movement against the U.S. dollar, as cautious
investors wait for developments in Iraq.

The local currency strengthened slightly last week to Rp 8,890
to the U.S. dollar, compared to the previous week's closing of Rp
8,910.

Thanks to the central bank's quick response, the rupiah has
been moving at a safe level, relatively unmoved by various stormy
news, both internal and external.