JSX may make gains if government meets IMF demands
JSX may make gains if government meets IMF demands
JAKARTA (JP): Clear progress in the implementation of lagging
areas of the government's economic reform programs will remain a
driving factor in stock trading this week, securities analysts
said.
However, they believed that reports of progress would only
result in a moderate increase in the Composite Index, the
benchmark price barometer of the Jakarta Stock Exchange (JSX).
Dandossi Matram from Bakrie Securities said over the weekend
there would be some positive news in the coming week, but its
impact on the market would be limited.
"The market will be moving upward just a bit next week, while
still attached to its stagnant medium term trend."
He said the price index would move between 5 percent and 10
percent this week on positive IMF-related news, and possible
developments in Paris Club talks.
The Indonesian government expressed confidence late last week
that it could implement all of the unrealized economic programs
-- including progress in bank and corporate debt restructuring --
by mid-April.
The government did not meet the March 31 deadline, which led
to a delay in the disbursement of the IMF's next scheduled loan
of US$400 million.
The government is also set to ask for a rescheduling of its
sovereign debts during the upcoming Paris Club talks. The
rescheduling would give a complementary push to galvanize the
country's moribund economy.
Dandossi said the stagnant trend in the JSX Composite Index
was due to the lack of legal certainty in the country, as well as
domestic security concerns.
"Foreign investors in general are still reluctant to come here
for any investment activities," he said. "It is because they are
afraid about whether the local laws can actually protect their
investments."
He said that until there were concrete steps in the betterment
of the human resources in the country's legal system, the
investment climate, including the equity market, would not
improve much.
Another analyst said he was also concerned about President
Abdurrahman Wahid's trip overseas, warning that conflicts between
groups within the Cabinet could grow during the absence of the
President.
"The market seems to be watching the impending rumors that
there are some moving against each other in the high political
echelons," he said.
Abdurrahman started on Saturday a nine-day trip to South
Africa, Cuba, Mexico and Hong Kong.
A currency dealer said the rupiah should take advantage of the
positive developments by the government in taking care of
problems on the IMF-sponsored reform programs.
"The rupiah finally recovered from its previous drop late last
week and it is predicted to continue its upward movement next
week."
The local currency closed last week at 7,663 compared to 7,620
the previous week. At its lowest point it almost hit 7,800 last
week.
He agreed the JSX Composite Index would have its correction
upward this week as the rebounding rupiah against the greenback
would provide a positive impact on the stock market.
The index dropped 2.1 percent last week to close at 570.81
points, down from 583.27 the previous week. The daily average
transaction value decreased to Rp 483.2 billion in the quiet
three-day trading week, compared to Rp 670.33 billion the
previous week.
The daily average turnover also decreased to 337.3 million
shares, from 591.7 million shares the previous week.
Last week's top gainers were PT Lion Mesh, whose shares jumped
67.74 percent, PT Tancho Indonesia (34.21 percent) and PT Alakasa
Industrindo (26.67 percent).
The week's big losers were PT Sorini Corporation, whose shares
fell by 26.67 percent, PT Toko Gunung Agung (25.81 percent) and
PT Mas Murni Indonesia (25 percent).
Top brokerage firms by transaction value were PT Goh Ometraco
with Rp 364.98 billion in transactions, PT Vickers Ballas Tamara
(Rp 155.78 billion) and PT Merrill Lynch Indonesia (Rp 134.14
billion). (udi)