JSX flat due to dearth of fresh foreign funds

JAKARTA (JP): Several analysts predicted that prices on the Jakarta Stock Exchange (JSX) will be flat this week as there will be no new inflows of foreign funds.

"I think foreign fund managers are still watching the development of the Indonesian macro-economy. And I do not see them making positive decisions on major investments in Indonesia," the president of PT BZW Niaga Securities, Steven Kenny, told The Jakarta Post here over the weekend.

Steven said that fund managers were worried about high inflation figures in the first two months of this year, despite deflation in March.

He said that they also need time to see how interest rates move in Indonesia.

"So I think they need a couple of months to see whether the Indonesian macro-economy improves," he added.

Steven denied the assumption that big foreign transactions, both in volume and value, indicated that foreign funds are still coming in.

"I would say that foreign fund managers are only moving their money from one stock to another. That is not a new inflow of funds," he noted.

Steven also cautioned that some annual shareholders meetings and the announcement of last year's financial reports could not help much to attract foreign funds.

"The prices of most shares already reflects the companies' performance. If there is something new, it is only about dividends. Unfortunately, foreigners prefer capital gains to dividends," he added.

An analyst from PT Sanyo Primarindo, Roberto Toruan, predicted that last week's leveling off will continue this week.

He said that foreign investors will continue to stay on the sidelines and trade only very selectively.

The listless participation of foreign investors last week, according to Roberto, resulted in a stagnant performance of most big cap stocks.

The JSX's composite index increased by only 1.96 point to close at 607.05 points last week.

Total trading value reached Rp 1.5 trillion (US$641.8 million) with 536 million shares changing hands.

Foreign buy transactions were recorded at Rp 1 trillion, as compared to sell transactions of Rp 944 billion.

Bank Mashill Utama, which was boosted by takeover rumors, led the top ten of stocks in terms of trading volume, with transactions of 56.1 million shares worth Rp 116 billion.

The share price of Astra Graphia, a computer distributor, was up 95.3 percent to close at Rp 2,650 from Rp 1,350 due to rumors that the company, which posted losses in 1994, booked profits last year.

"I don't understand why local investors were so active on third liner stocks which didn't see sound performance. I think they did this because they felt these shares were undervalued and that this was the only way to make a profit," Roberto told the Post.

PT Bumi Modern, the owner of the Hyatt regency in Surabaya, East Java, was the top loser, reporting a 115 percent increase in net losses last year.

Bumi Modern shares closed the week 22 percent down, at Rp 1,050.

The company's net losses increased from Rp 11.5 billion in 1994 to Rp 24.5 billion in 1995.

Last week's top ten stocks in terms of value were HM Sampoerna (which recorded a total trading value of Rp 137 billion), followed by Bank Mashill (Rp 116 billion), Lippo Life Insurance (Rp 96 billion), Telkom (Rp 83 billion), Duta Pertiwi (Rp 53 billion), Indah Kiat Pulp & Paper (Rp 52 billion), Steady Safe (Rp 50 billion) and Lippo Land Development (Rp 49 billion), Gudang Garam (Rp 44 billion) and Modern Bank (Rp 44 billion).

Astra Graphia, which gained 95.3 percent last week, led the top ten gainers, followed by Apac Centertex (which was up by 37 percent), Bakrie Sumatra Plantation (35 percent), Putra Surya Perkasa (33 percent), CP Prima (31 percent), Modern Bank (27 percent), Bank Umum Nasional (23 percent), Eratex Jaya (22 percent), Panin Overseas (21 percent) and Indah Kiat (20 percent). (08)