Investors hesitant, say stocks analysts
JAKARTA (JP): President Soeharto's absence from the country will become a major concern for investors on the Jakarta Stock Exchange (JSX) and securities analysts predict that share prices are likely to fall further on investors' wait-and-see attitude.
"There should be no need to panic just because the President has a medical checkup. But because investors are naturally concerned about his health, they are now nervous," an analyst said.
Soeharto left the country yesterday for a medical checkup in a European country.
"They might consider that the President's travel this time is different," the analyst, who preferred anonymity, told The Jakarta Post here over the weekend.
Several dealers with foreign-based securities companies contacted by the Post said that an immediate report on the result of Soeharto's medical checkup result is the key to regaining investors' confidence.
"It doesn't mean that share prices will immediately go up just because the checkup shows that Soeharto is all right," an analyst with a London-based securities company said.
"No matter if the result is all right or not, the market is likely to either go down or be stagnant this week," the analyst added.
"Share prices have already dropped too much, so I do not expect any strong selling pressures this week," Lippo Securities Managing Director, Kelvin Lee, told the Post over the weekend.
"And although there is a change for buying, most investors would prefer to hold their positions while waiting for confirmation about the President's health."
Another analyst, however, doubted if last week's market plunge was triggered only by the rumor about the President's health.
"I would say that foreign investors might have also expected this sharp plunge," a dealer from a Japanese-based brokerage said.
The dealer said foreign investors have considered that JSX stocks were already overvalued in the past few months following a dramatic increase early this year.
The JSX composite price index peaked at 630 in April, as compared to this year's opening of 513.
Although most big caps were down last week, none of the analysts expected strong buy orders this week.
The JSX witnessed last week a drop of 3.2 percent as the rumor on Soeharto's health emerging midweek was overreacted on by many investors. Foreign selling pressures on late last week were strong enough to push down the composite index by 19 points to close the week at 575.05.
Analysts actually predicted a stable performance on the JSX last week following a 3.7 percent rebound in the previous week as foreign investors picked up blue chips which had been already down.
The share prices increased by two points on Monday from last week's opening of 594 to 596 but then fell back to 594 on Tuesday and Wednesday.
Total transactions on the JSX reached 569 million shares valued at Rp 1.6 trillion last week, as compared to the previous week's 638 million shares worth Rp 1.9 trillion (Rp 811 million).
Foreign buy transactions amounted to Rp 1.3 trillion against sell transactions of Rp 1 trillion.
Cigarette maker HM Sampoerna closed down at Rp 24,600 (as compared to the week's opening of Rp 26,500), while its rival Gudang Garam closed at Rp 14,000 (Rp 14,450).
Telecommunication operator Telkom, which rebounded by Rp 225 in the previous week, declined Rp 100 at last week's close to Rp 3,425, while Indosat lost Rp 475 to close at Rp 7,350.
Other big caps which were corrected last week were Semen Gresik, which closed at Rp 6,300 (against the previous week's opening of Rp 6,775), Bakrie Sumatra Plantation at Rp 14,000 (Rp 14,450), Bank Internasional Indonesia at Rp 10,975 (Rp 11,500), Barito Pacific Timber at Rp 1,375 (Rp 1,525), Citra Marga at Rp 3,425 (Rp 3,550) and Indah Kiat Pulp & Paper at Rp 2,175 (Rp 2,275).
Bimantara Citra, which is controlled by Soeharto's second son, Bambang Trihatmodjo, was among the top 10 losers. Its share price lost 12 percent to close at Rp 2,550.
Several stocks on the top losers list were Multi Bintang, which dropped by 20 percent to Rp 9,800 and Petrosea by 12 percent to Rp 1,825.
Meanwhile, a distributor of photographic equipment, Inter Delta, gained 84 percent, boosted by a takeover rumor.
The most active stocks in terms of trading value were HM Sampoerna with total transactions of Rp 226 billion, a newly listed London Sumatra Rp 119 billion, Citatah Rp 105 billion, Sona Topas Rp 89 billion, Telkom Rp 83 billion, Lippo Karawaci Rp 79 billion, Lippo Land Rp 76 billion, Super Indah Rp 57 billion, Gudang Garam Rp 53 billion and Indah Kiat Rp 32 billion. (alo)