Jakarta stocks to continue rally, rupiah may weaken slightly
Jakarta stocks to continue rally, rupiah may weaken slightly
Rendi A. Witular, The Jakarta Post, Jakarta
The Jakarta composite stock index is expected to continue its
rising trend this week albeit at a slower pace, while the rupiah
may weaken against the U.S. dollar on a technical correction.
PT Mandiri Sekuritas stock analyst Zulfikar said that positive
corporate news would continue to push prices higher.
"The rising trend of the index will continue," he told The
Jakarta Post over the weekend, but added that the increase would
be limited due to the lack of fresh positive news.
He predicted the stock index would hover between 490 and 500
this week.
During last week's four trading days, the Jakarta Composite
Index jumped by 25.86 points to 494.78 from the previous week's
closing of 468.92.
The daily average transaction value also rose significantly to
Rp 652 billion (US$78.5 million), from Rp 400 billion a week
before.
Zulfikar said the market would try to reach a higher
resistance level of between 515 and 520 this week, although this
would be hard to achieve as corporate earning results had been
largely anticipated, while no major positive news was expected.
As for the military conflict in Aceh, Zulfikar said that
investors would still closely watch developments, but that the
stock market had begun to be less susceptible to political
factors.
On the currency market, HSBC Bank analyst Wiling S. Bolung
said that the rupiah would slightly weaken on a technical
correction after it had strengthened "too rapidly" against the
U.S. dollar in previous weeks.
The correction had actually started during the last trading
days of the previous week, sending the rupiah to close lower at
Rp 8,350 per dollar compared to Rp 8,275 two weeks ago.
"There are a lot of parties that have run short of dollars; I
think the rupiah would be corrected to around Rp 8,400 in the
next couple of days," said Wiling.
Bank Indonesia Governor Burhanuddin Abdullah said that the
rupiah had appreciated too fast last week, and that this would
likely to hurt the country's exporters.
The rupiah had been strengthening over the past couple of
weeks, mainly due to overall negative sentiment against the
American greenback, and its sharp appreciation had prompted some
companies to purchase dollars for repaying overseas debts.
Indonesian companies owe about $60 billion in overseas debts,
including bonds, according to the central bank.