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.