Indonesian stock market set to drift this week

Indonesian stock market set to drift this week

JAKARTA (JP): Stock trading on the Jakarta Stock Exchange
(JSX) is likely to increase slightly this week after last week's
silence in the regional market, analysts said.

They warned, however, that some investors would continue to
take a wait-and-see attitude amid uncertainties over a state
budget and bank recapitalization program.

Bahana Securities associate director and head of equity sales
Andre Cita said most regional investors, after having a Lunar New
Year holiday last week, would reenter the market on Monday,
likely to push trading activities.

"I think trading will pick up again, the market will make some
bargain. I would expect the market will be a bit stronger next
week and certainly much more active," Cita said.

BNI Securities head of research, Adrian Rusmana, agreed and
said that the market would see a technical rebound early in the
week but would slow down again due to lingering uncertainties
over the bank recapitalization plan.

"I expect an early technical rebound next week. There will be
some drive to buy stocks as most investors haven't bought stocks
for some time. But this sentiment cannot sustain for long."

In the week to Friday, the JSX Composite Index gained 3.466
points to close at 404.018 points, up 0.9 percent.

Average daily volume fell drastically to 98.6 million shares
last week from 198.8 million shares the previous week. Average
daily transaction value also dropped to Rp 77.5 billion (US$8.8
million) from Rp 200.96 billion.

An institutional sales broker at Trimegah Securindolestari,
Vonny Juwono, said that trading is likely to remain lackluster
next week.

Investors will continue to take a wait-and-see attitude as
discussions in the House of Representatives about the budget for
the 1999/2000 fiscal year, to start on April 1, wind up on Feb.
26.

Another reason for inaction will be continuing worries about
impending bank closures under the country's bank recapitalization
program. On Feb. 27, the government is due to name banks that
will be closed.

Bank Indonesia governor Sjahril Sabirin has indicated that up
to 40 banks could be closed down.

"These worries will be around next week. In addition,
investors are waiting for the privatization of two state firms,"
Vonny said.

They are international call operator PT Indosat and general
mining firm PT Aneka Tambang.

The government has, so far, only sold a 14 percent stake in
cementmaker PT Semen Gresik in the current fiscal year to
Mexico's Cemex SA for US$1.38 per share, raising $121.5 million.

Last week, the government selected Grosbeak Pte. Ltd, a unit
of Hong Kong's Hutchison Whampoa, as preferred bidder for a 49
percent-51 percent stake in PT Jakarta International Container
Terminal (JICT), a unit of state-owned port operator PT Pelabuhan
Indonesia II. Neither JICT nor its parent company are listed on
the JSX.

In the foreign exchange market, meanwhile, the rupiah ended
last week trading at 8,850, slightly weaker from the previous
week's close of 8,700.

Currency dealers predicted that the rupiah should remain in
the current vicinity or could even weaken again if the Japanese
yen, which broke the 120 mark against the dollar, continued to
slide. (rid)