Jakarta market trading likely to ease this week

JAKARTA (JP): The Jakarta stock market will probably ease this week as foreign investors are expected to remain sidelined.

Securities analysts said foreign investors would again take a wait and see position for the last part of the campaign.

"It seems that foreign investors are not very comfortable with reports of increased violence ahead of the May 29 elections," one analyst said.

The head of research at Vickers Ballas Tamara Securities, David Chang, said the main concern for investors this week would be growing tension among the three political parties -- the Moslem-based United Development Party (PPP), Golkar and the Indonesia Democratic Party.

The campaign activities in the previous weeks had been marred with violence primarily involving PPP and Golkar supporters.

About 73 people have died in campaign activities, mostly in traffic accidents.

But the Armed Forces has assured national security.

Chang said besides the political woes, many investors also feared further increases in U.S. interest rates.

"Some investors worry about a possible increase in interest rates, some don't," he said.

The Federal Reserve is scheduled to have its Federal Open Market Committee meeting on May 20.

The Federal Reserve raised its key discount rate 25 basis points to 5.5 percent on March 25.

The JSX composite index fell 16.61 points, or 2.5 percent, to 657.07 last week.

Total average daily volume rose to 305.5 million shares from 228.6 million the previous week.

Total daily transaction value rose to Rp 572.68 billion (US$238.62 million) from Rp 455.28 billion.

Friday last week, the integrated specialty chemical maker PT Eterindo Wahanatama listed 688,29 million shares with its initial offering price of Rp 1,300.

Eterindo's shares opened at Rp 1,400 and closed up at Rp 1,575.

A broker with a joint brokerage house said quality investors kept targeting Eterindo share because of its respectable Rp 1.08 trillion market capitalization.

Last week most blue chip stocks fell.

State-owned Telkom slipped Rp 175 to Rp 3,675, satellite operator Indosat by Rp 300 to Rp 6,800, Cigarette maker HM Sampoerna dropped Rp 300 to Rp 9,700 while rival Gudang Garam lost Rp 825 to Rp 9,725.

Bank Negara Indonesia fell Rp 50 to Rp 1,500, Bank Internasional Indonesia slipped Rp 100 to Rp 1,775 and Bank Dagang Nasional Indonesia fell Rp 375 to Rp 2,350. (09)