Jakarta stocks seen drifting down

Jakarta stocks seen drifting down

JAKARTA (JP): The Indonesian stock market took another plunge
on last Friday's news of higher-than-expected U.S. gross domestic
product (GDP) growth of 3.9 percent.

This signals a further increase in U.S. short term interest
rates by the first quarter of 1995, which should put further
upward pressure on local deposit interest rates.

Meanwhile, lack of fresh sentiment, uncertainty in the
regional stock markets and more initial public offering (IPO)
issues have kept most investors on the sideline.

The Jakarta Stock Exchange (JSX) Composite Index dropped by
16.52 points (3.4 percent) from the previous week, to close last
week at 471.05. Over the medium term, the market is expected to
drift further down.

A series of new stock offerings ahead should reduce
secondary market trading liquidity, constraining an increase of
the index.

Meanwhile, there will be more focus on defensive stocks which
are less sensitive to higher interest rates.

Average daily turnover on the regular board decreased to 8.76
million shares worth Rp 36.82 billion (US$16.80 million) last
week from 10.52 million shares worth Rp 42.30 billion in the
previous week.

Last week's total turnover increased to 91.26 million shares
valued at Rp 404.23 billion from 75.35 million shares valued at
Rp 320.43 billion in the previous week.

Foreign investors, still in net selling positions, have been
actively redeeming their funds and reallocating their Indonesian
portfolios. Their selling activities were mostly concentrated in
Gadjah Tunggal, Indah Kiat and HM Sampoerna, while Indosat was
still being actively pursued by foreign buyers. Local investors
were mostly sellers of Astra International, Indosat, Indah Kiat,
Inco, Barito Pacific Timber and Duta Anggada, and buyers of
Gadjah Tunggal.

Sorini Corporation's 1-for-3 rights shares were listed last
week at a price of Rp 6,000 per share. Some of last week's best
performers were Plaza Indonesia (up Rp 400), Branta Mulia (up Rp
375), Asuransi Bintang, Indosepamas, Tancho Indonesia (up Rp 300
each) and Dankos Labs (up Rp 200). The biggest losers were Metro
Supermarket (down Rp1,950), Modern Photo (down Rp950), Mayora
Indah (down Rp900), Indofood (down Rp725) and Hero Supermarket
(down Rp700). Losers outnumbered gainers by 86 to 25, while 65
remained unchanged.

-- Sigma Batara