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