JSX expects further rallies this week
JSX expects further rallies this week
JAKARTA (JP): The Jakarta Stock Exchange (JSX) will remain firm this week, boosted by an expected stronger performance on Wall Street and regional markets, dealers said.
"But next week may see another significant drop of Astra's share prices, as a response to the government's statement on Friday that only one carmaker, PT Timor Putra, will be exempted from import tariffs and luxury sales tax for the next three years," a senior analyst from Lippo Investment told The Jakarta Post over the weekend.
The analyst disclosed that based on the drop of Astra's foreign prices which closed at Rp 3,600 (US$1.54) last week, as compared to Rp 4,850 before the issue of the Presidential Instruction on the car industry few weeks ago, foreign investors might have lost Rp 208 billion on the stock.
"And I am sure there will be another drop next week," he added.
The analyst also questioned the controversial protection extended by the government to PT Chandra Asri, a company manufacturing olefin products in Cilegon, West Java.
"Six months ago, the government said that the olefin center would not be granted tariff protection. But they quietly broke the promise as if the foreigners had already forgotten about the promise," he said.
"How can the government expect foreigners to help develop the capital market if they do not explain what they are going to do?" he questioned.
He said that six months ago, the publicly-listed PT Tifico, which is controlled by Japanese investors, threatened to pull out their investment here if the government gave protection to Chandra Asri.
"So I am afraid they will really leave the country," he added.
Despite the feeling of uncertainty among foreign investors, analysts are optimistic that the prices of JSX shares will go up this week.
Some analysts said that JSX will most likely fluctuate according to the performance of Wall Street and the regional markets.
"If the U.S government reduces the Fed rate, it would be very positive for the Asian markets," an analyst said.
Strong
The analyst said that in the next three months up to May, the market will perform strongly and the price index may fluctuate between the current level to the 600 level.
"Therefore, I disagree with the assumption that most shares on the JSX have been overvalued," he said.
Dandossi Matram from the Jakarta Brokers Club forecasted that the JSX will see a weakening performance of the second liner and small caps stocks which dominated the market last week, while some blue chips will rebound this week.
Last week, the JSX recorded a total trading value of Rp 1.2 trillion with 398.3 million shares of 195 companies changing hands.
Foreign investors became net buyers with a total buy transaction of Rp 854.8 billion compared to their total selling of Rp 823 billion.
The JSX index closed the week eight points higher at 576.79, after hitting its lowest at 544 points on Monday on panic selling.
Analysts said that most of big transactions were supported by rumors.
Three of Lippo Group's stocks were among the actively-traded shares.
"The 29 percent rise in Lippo Land share prices was boosted by rumors that the company had sold its property department in Singapore and will get a new partner from Hong Kong," the chairman of the Jakarta Brokers Club, Nurkhamid Akhmad, told the Post.
Lippo Land closed the week at a new high of Rp 3,775 with a total transaction of 23.1 million shares valued at Rp 79.2 billion.
Lippo Pacific gained Rp 850 or 100 percent increase to close at Rp 1,700.
The only listed securities company, PT Lippo Securities, whose foreign partner Swiss Bank Corp. has pulled out, rose 29 percent to Rp 2,050 following a rumor that another foreign partner might join the company.
Similar rumors also boosted property company PT Bhuwanatala Indah Permai, which is now controlled by Bambang Trihatmodjo and Johanes Kotjo. Its prices increased by 23 percent to Rp 3,450 with 10.8 million shares changing hands at Rp 33.4 billion.
A takeover rumor also bolstered shoemaker PT Super Indah Mitory, which was up 102 percent to Rp 1,725 at the week close.
Ciputra Development was among the top 10 losers, which closed the week 7.7 percent lower at Rp 4,500.
An analysis report said that Ciputra may book Rp 90 billion in net profits for 1995, much below the expected Rp 106 billion because the Indonesian Capital Market Supervisory Agency did not allow the company to book the extraordinary profit of its Surabaya project. (08)