JSX may be weaker on wait-and-see mood
JAKARTA (JP): Some analysts predicted a weaker performance on the Jakarta Stock Exchange (JSX) this week as many investors are worried about an increase in U.S. interest rates.
"The U.S. stronger employment data in April and May seems to trigger an increase in interest rates. But we have to wait for the Federal Reserve's decision," an analyst from PT Peregrine Sewu told the Jakarta Post.
"Investors don't like uncertainty. Because of investors' fear on an interest rate hike in the United States, I think the market should be dependent to the U.S. market," the managing director of Lippo Securities, Kelvin Lee, said.
"It is, however, positive to see the impact of the new data on the U.S. market soon, whether it's positive or negative. The point is that it will reduce uncertainty," Lee added.
The two analysts also viewed that activities on the JSX will be quiet this week because of a lot of concentration on new initial public offerings (IPO).
Another analyst said that there might be one IPO, by PT Lippo Karawachi early this week, while two other offerings will come later.
The Peregrine analyst, who preferred not to be named, said that share prices of selected pulp and paper stocks like Indah Kiat would continue to increase this week, although in a very narrow range.
"I would also say that investors may leave retail stocks like Matahari for a while because of the planned IPO of other retail companies like Pasar Raya and Ramayana," the analyst added.
He said that it is going to happen because Pasar Raya may be priced at a price earning ratio (PER) of 15 to 20 times, as compared to the sector's PER level of above 20 times now.
He also said that selected textile and shoe counters, which just received positive support from a new regulation issued by the government last week, may see a slight increase this week.
"But I think the impact of the deregulation has been reflected in the prices of those stocks at this week's close. So, I don't expect further increase next week," a senior analyst with a London-based securities company told the Post on Friday.
Rumors
Last week, the JSX saw another very weak performance although the government issued a positive inflation rate figure and announced a new trade deregulation package in the middle of the week.
"There is no dramatic impact on the stock market although the regulation is positive for export oriented companies," Lee said.
Another analyst viewed that Astra International should have got strong support from the exemption of luxury tax on vehicles with local contents of higher than 60 percent.
"But a Presidential decree which allows the Timor car to be imported was another piece of bad news for Astra," he said.
"Although there was no significant impact, I would say that investors are concerned more on the decree than the deregulation," he added.
"But it does not explain the weakness on the JSX this week," he said.
Trading on the JSX last week was flavored by rumors on two different counters -- Perdana Cipta Multi Finance and Super Indah Makmur.
Several dealers contacted by the Post said that rumors on a takeover and rights issue were the main reasons for significant increases in the two counters' share prices.
An analyst with a foreign brokerage firm said "any rumor, in which Kotjo (businessman Johannes Kotjo) is involved, should be interesting."
The first rumor was that Kotjo would take over Super Indah, a plastic maker. It pushed up the company's share price by 136 percent last week to Rp 3,250 (US$1.30).
"It doesn't make any sense to me," a senior trader, Nurkhamid Akhmad, said.
Nurkhamid said although the stock was suspended for one session on Tuesday because of a 78 percent price increase on Monday, the price still went up after the suspension was lifted.
"We are uncertain whether the rumor is going to be true. If it is true, then why didn't the company say anything about it in its statement and why did the price manage to go up?" Nurkhamid asked.
Super Indah was recorded as the top gainer last week and the second biggest in transaction value and volume, with 30 million shares traded worth Rp 90 billion.
Another company run by Kotjo, Perdana Cipta Multi Finance, was recorded as the second top gainer last week, with its price rising 48 percent to Rp 2,975 at the week's close.
Nurkhamid said a rumor that the company was going to issue rights shares was the trigger for such a sharp increase.
The company's management has also confirmed in a press statement that it had planned to issue 100 million rights shares detachable with 15 million warrants but that it is subject to shareholders' approval in their planned-meeting on June 31.
JSX share prices declined slightly last week by 0.6 percent with its composite index closing the week 4 points lower at 612.76.
Transaction volumes, however, remained big with 399 million shares traded valued at Rp 1.1 trillion.
Foreign buy transactions amounted to Rp 707 billion, against sell transactions of Rp 743 billion.
The most active stocks in value were JIHD (with total transaction value of Rp 154 billion), Super Indah (Rp 90 billion), Astra International (Rp 84 billion), Telkom (Rp 69 billion), Perda Cipta Multi Finance (Rp 47 billion), HM Sampoerna (Rp 42 billion), Lippo Land (Rp 31 billion), Apac (Rp billion), Indosat (Rp 23 billion) and Gudang Garam (Rp 22 billion). (alo)