Jakarta stocks expected to be mixed this week
Jakarta stocks expected to be mixed this week
JAKARTA (JP): Trading activities on the Jakarta Stock Exchange
(JSX) are expected to be mixed this week with profit taking by
local investors, securities analysts and brokers said.
They said foreign interest would be weak this week due to the
three-day working holiday in Hong Kong.
"With the Hong Kong bourse closed next week, most foreign
investors will be absent, but this will not necessarily mean a
weaker market," an analyst with a joint venture securities house
said.
The Hong Kong stock market will be closed for three days --
Monday to Wednesday -- to mark the transfer of sovereignty to
China.
"But some secondary stocks might continue gaining on
speculative interest," said Adnan Tan, sales director of Morgan
Grenfell Asian Indonesia.
He said the absence of foreign investors this week did not
necessarily mean weak trading activities in the local market as
local investors had been strong over the past six months,
especially on the second and third line stocks.
"The support of local investors is extremely good," Adnan told
The Jakarta Post over the weekend.
Another analyst from a joint venture securities house agreed
and said a stronger and increasingly active role by domestic
investors over the past six months could compensate the absence
of foreign investors.
Although the Hong Kong stock market is closed for three days,
foreign funds from the United States and some European countries
would continue venturing the JSX due to its strong economic
fundamentals, Adnan said.
DBS Securities Indonesia said the macroeconomic fundamentals
in Indonesia remained favorable, with inflation rates remaining
in check.
DBS Securities said the World Bank Report "Sustaining High
Growth with Equity" had undoubtedly showed the country's strong
economic performance.
"Such indicators have strongly suggested that Indonesia is one
of the fascinating markets," one analyst said.
The JSX recorded a new composite index high of 719.638 points
last Monday largely because of heavy purchases by local
investors, brokers said.
The JSX composite index climbed 4.61 points to close at 716.83
points last week from 712.22 the previous week.
Total average daily volume rose 18 percent to 373.2 million
shares changing hand last week from 314.78 million shares the
previous week.
Total average daily transaction value also increased by 4
percent to Rp 642.48 billion (US$267.7 million) last week from Rp
613.68 billion the previous week.
Analysts said the possible weakening transaction activities
this week did not necessarily push the index down.
"We have even projected the JSX composite index will go higher
in the coming weeks," said a senior dealer with Asian Development
Securities.
"We expect this will reach 750 in the next few weeks," she
said.
But most brokers said the index would hover around 711 points
to 720 points this week.
Blue chip stocks closed mixed last week.
Telkom fell Rp 25 to close at Rp 3,975 while Indosat was down
Rp 375 to Rp 7,175.
Cigarette manufacturer HM Sampoerna was down Rp 1,075 to close
at Rp 8,925 following expectations of lower sales, while
competitor Gudang Garam was up Rp 25 at Rp 10,000.
Bank Negara Indonesia lost Rp 100 to close at Rp 1,500 while
Bank Internasional Indonesia went down Rp 75 to close at Rp
2,075. (09)