JSX expected to gain ground this week

JAKARTA (JP): The Jakarta stockmarket is likely to remain strong this week on the back two consecutive days of upbeat trade after the Idul Fitri and Chinese New Year Holidays.

Securities analysts and dealers said the market was strong early last week but showed signs of profit taking by the end of the week.

"Last week saw a lot of foreign funds flow into the market," Peregrine Sewu Securities research director Felix Otto D'Souza said.

Dealers attributed the upbeat market to foreign and local investors buying blue chip and second line stocks.

"Local investor participation was high," HG Asia dealer Surya said.

Vickers Ballas Tamara research director David Chang said the strong market to Indonesia's sound macroeconomic fundamentals.

The JSX composite index ended the week 10.20 points at 704.48 and hit a record 707.37 Thursday.

Turnover averaged 224.5 million shares worth Rp 577.8 billion (US$ 243.8 million), up from the previous week's 169.2 million shares worth Rp 417.35 billion.

On Friday 253.8 million shares worth Rp 621.5 billion ($262.23 million) changed hands against 135.1 million shares worth Rp 313.4 billion on the previous week's last trading day.

Felix said foreign investors, particularly from the U.S., pushed up the JSX composite by shifting funds to emerging markets like Indonesia.

Securities analysts expected foreign investors to keep buying blue chip, bank, consumer-related, transport and retail stocks.

"Investors will still be upbeat on blue chip stocks," Felix predicted.

He said the JSX composite index might go higher in the weeks ahead.

Felix said banking stocks would remain favorites because of better-than-expected profit results last year and a chance of lower interest rates this year.

But he said BNI was overvalued and probably would not rise. The promising bank stocks were BII, BDNI and Modern bank, he said.

Chang said consumer-related stocks like Fiskaragung, Davomas Abadi, Sierad Produce would be sought after.

He said fine-iodized salt manufacturer Fiskaragung was expected to perform strongly because of the government's iodine deficiency control projects.

Sekar Bumi is expected to benefit from increasing world demand and its involvement in developing a 500-hectare shrimp pond in Sumbawa, West Nusa Tenggara.

He said cocoa butter and powder producer Davomas Abadi would perform well because of increasing demand for its products in Eastern Europe and Asia.

Last week blue chip stocks like Gudang Garam, HM Sampoerna, Indosat, Telkom, BNI closed in mixed positions.

State-owned BNI gained Rp 75 to Rp 1,725, Indosat rose Rp 450 to Rp 7,200 while Telkom was steady at Rp 4,200.

Gudang Garam dropped Rp 400 to Rp 10,850, while HM Sampoerna lost Rp 175 to Rp 14,625.

Second line stocks which group mid-sized stocks like Fiskar Agung, Davomas, Citra Marga Nusaphala Persada (CMNP), Igar Jaya, Modern Bank, Hero Supermarket, Suba Indah were among last week's strong performers.

Fiskar Agung jumped Rp 950 to Rp 4,350, Davomas Abadi soared Rp 750 to Rp 3,525, Igarjaya added Rp 325 to Rp 1,700, Modern Bank was Rp 325 stronger at Rp 2,050, CMNP rose Rp 225 to Rp 2,350 while Suba Indah put on Rp 400 to Rp 2,950. (09)