Indonesian stocks likely to strengthen this week: Dealers
Indonesian stocks likely to strengthen this week: Dealers
Agence France-Presse, Jakarta/Singapore/Tokyo
Indonesia's stock market, which fell 1.2 percent in the past week, is likely to strengthen this week on attractive valuations for mining and telecom stocks, dealers said.
"I am optimistic that, the market will try to move higher. Normally, at the start of the month the rupiah strengthens. So, we can assume the index will improve," said Robin Setiawan, a researcher with AmCapital Indonesia Securities.
Investors are expected to pursue stocks from mining companies such as International Nickel Indonesia (Inco), Aneka Tambang and Timah, Setiawan said. He said players would also consider buying Telkom stocks after the firm on Friday approved a 2003 dividend of Rp 301.946 per share.
The Jakarta Stock Exchange composite index closed on Friday at 756.983, down 9.384 points or 1.24 percent on the previous Friday. Average daily volume for the week was 1.37 billion shares worth Rp 581.4 billion (US$63.64 million) compared with 1.38 billion shares worth Rp 573.1 billion in the previous week.
In Singapore, the stock market is awaiting key results from Singapore Telecommunications and Creative Technology after ending on a cautious note on Friday amid volatility in world oil prices.
Traders said strong profit reports from the island's two biggest banks failed to boost sentiment significantly ahead of the weekend on worries over how Wall Street will perform on Friday.
The Straits Times index ended the week at 1,891.71, up 41.45 points or 2.2 percent from its close the week before. Average daily volume for the week was 493 million shares worth S$499.76 million, down from 539 million shares.
Singapore's two biggest banks, DBS Group and United Overseas Bank (UOB), on Friday reported stellar June quarter earnings, reflecting the city-state's powerful rebound from last year's Severe Acute Respiratory Syndrome (SARS) health crisis.
Optimism was further reinforced when the unemployment rate remained at 4.5 percent in June, with more hirings recorded and retrenchments easing.
Singapore's export-driven economy is recovering strongly from the impact of SARS and a U.S.-led global slump, with gross domestic product projected to grow by as much as nine percent this year, well above the official forecast of 5.5 to 7.5 percent.
In Tokyo, Japanese shares are likely to remain firm but much will depend on how Wall Street reacts to US economic growth data in the April-June quarter due out later in the day, analysts said on Friday.
"The direction of Japanese stock trading will be set by the outcome of U.S. GDP (gross domestic product) data," said Hiroyuki Nakai, senior market analyst at Tokai-Tokyo Research Center.
Last week, the Tokyo Stock Exchange's benchmark Nikkei-225 index rose 138.45 points or 1.24 percent to close at 11,325.78. The broader TOPIX index of all first section shares gained 4.01 points to 1,139.30.
Kazumasa Niimi, market analyst at Japan Research Institute, said the Nikkei index would rise to the 11,600-point this week.
"Since the index did not fall below the 11,000-point level last week, investors, particularly foreign investors, will continue buying as they expect a stable move in the Nikkei index in line with Wall Street," Niimi said.
But Tokai-Tokyo's Nakai said worries over rising oil prices could pressure Japanese and U.S. shares due to the negative impact on the global economy.
Meanwhile, the Hong Kong stock market's main index is likely to breach the 12,500 points mark expected strong earnings from HSBC are likely to drive the market upward.
The key HSI gained 885.04 points or 7.8 percent over the past week to close on Friday at 12,238.03.