Jakarta stocks, local unit to continue appreciation trend this week: Analysts
Jakarta stocks, local unit to continue appreciation trend this week: Analysts
Rendi A. Witular, The Jakarta Post, Jakarta
The Jakarta composite stock index is expected to continue its
rally this week on lingering positive corporate news, while the
rupiah is also predicted to continue its appreciation trend,
albeit at a slower pace, analysts say.
A stock analyst with a local bank said the stock index would
try to test a higher resistance level of 520, after closing at
510.69 on Friday, up 15.91 points from the previous week's level
of 494.78. But the daily average transaction value declined
slightly to Rp 610 (US$74.8 million) from Rp 652 billion the week
before.
The analyst said that dividend announcements by some companies
had heartened investors, which in turn had lifted the stock
index.
He said the announcement last week by the country's largest
cigarette maker, PT Gudang Garam, and retail company PT Ramayana
Lestari Sentosa to allocate a hefty dividend for the 2002
financial year was positive news.
Gudang Garam will pay a dividend of Rp 300 per share, while
Ramayana Rp 100 per share.
"We expect the index can rise to its second resistance level
this week on more positive news," the analyst said.
The analyst added that underlying market sentiment would
remain positive for next week, thanks to the rupiah's 10 percent
rise since January against the U.S. dollar and falling interest
rates.
The central bank benchmark interest rate fell to 10.27 percent
last Wednesday, with Bank Indonesia Governor Burhanuddin Abdullah
saying there was still room for the rate to drop lower amid
benign inflation.
There is an expectation in the market that the rate could fall
to below 10 percent.
Bank Indonesia has been guiding down its interest rate lower
for the past year. The rate was above 17 percent early last year.
As for the diplomatic row between Indonesia and Sweden over
Sweden's refusal to act against several leaders of the Free Aceh
Movement (GAM) living in the country, the analyst said the issue
was of little consequence.
On the currency market, Bank NISP analyst Iwan Dharmawan said
that given the current positive macroeconomic condition as
reflected by the decline in the interest rate, the rupiah would
test a stronger level of Rp 8,100 per dollar.
"The rupiah will further stabilize in the coming week,
maintaining its recent trend," Iwan said.
Iwan, however, said that there would be some correction this
week, particularly if the rupiah appreciated too rapidly.
He predicted the rupiah would stabilize in the range of
between Rp 8,200 to Rp 8,100.
The rupiah closed last week's trading stronger at Rp 8,180 per
dollar, compared to Rp 8,350 in the previous week.