JSX may remain quiet on BNI's share offering

JAKARTA (JP): Analysts have predicted trading activities on the Jakarta Stock Exchange (JSX) will continue to be quiet this week as most investors concentrate on the initial public offering of state-owned Bank Negara Indonesia (BNI) 1946.

Apart from a contraction on BNI shares, which go public today, analysts were not expecting international events to influence market sentiment.

Analysts were pessimistic about the United States (U.S.) presidential election this week having any major impact on investors behavior in emerging markets, including Indonesia's.

"There has been a very low level of activity in recent weeks from U.S. based investors and I don't see the U.S. election having any direct impact in Indonesia," the president of PT BZW Niaga Securities, Steven Kenny, told The Jakarta Post over the weekend.

Another analyst from a foreign brokerage said that whoever wins the coming election, be it Bill Clinton or Bob Dole, would not help revive U.S. investor interest in Indonesia.

The analysts agreed that most U.S. investors were driven by U.S. macroeconomic policies and not by political issues.

A former PT Inter Pacific Securities president, L.G. Rompas, predicted no major change to U.S. economic and political policies on Indonesia after the election.

"Foreigners who invest in Indonesia are not only Americans but also from Europe and other Asian countries. So if there is any impact, it will be very minimal," Rompas told the Post.

The major reason for foreign fund managers to come to Indonesia is to take advantage of its equity market, he said.

Rompas and Kenny predict BNI's initial public offering will be successful as have previous offerings of other state-owned firms.

"Compared to the other listed state-owned companies (Telkom, Indosat, Tambang Timah and Semen Gresik), BNI might be less interesting in terms of industry. But it remains attractive due to its large size and its status as a state bank," Rompas.

Although several banking stocks are currently less expensive than BNI shares, investors would prefer to buy BNI, he said.

"Many foreign investors have ordered BNI shares. So, I think the offering will be many times oversubscribed," Kenny said.

Dealers said last week that the price of BNI shares, Rp 850 (36 U.S. cents) each, has increased by around 5 percent in the gray market.

Meanwhile, the chairman of the Jakarta Brokers Club's communications division Dandossi Matram, criticized BNI's management and underwriters of the offering, for the lack of aggression and communication in the promotion of the initial public offering.

"It's a very big issue. But I don't understand why the underwriters have yet to inform the public about how or where to get the shares," Dandossi told the Post.

Putera

Concentration on BNI's offering weakened the market last week. The JSX stock prices decreased by 0.1 percent with the composite index declining by 0.67 point to 570.65 at the weeks close.

Total transactions on the JSX reached 456 million shares valued at Rp 993 billion last week.

Foreign buy transactions amounted to Rp 695 billion, as compared to sell transactions of Rp 614 billion.

"There was no news which could help lift market sentiment while speculation on Astra's shares dipped because rumors of a "take-over" had been gradually clarified, a dealer with a foreign brokerage said.

The only big news midweek was an official announcement by Putera Sampoerna, the founder and president of cigarette maker PT HM Sampoerna, that he controlled a 15 percent stake in Astra.

Putera's statement, according to the dealer, failed to stimulate market sentiment on Astra because investors had anticipated the statement.

Astra booked a total trading value of Rp 54 billion with 12 million shares changing hands. Its share price rose by Rp 150 to Rp 4,100.

Newly listed Daya Guna Samudra of the Djajanti Group topped the list of most active stock with a trading volume of 33 million shares worth Rp 74 billion.

Other most actively-traded stocks during the week were Telkom (with a trading value of Rp 59 billion), Indosat (Rp 49 billion), HM Sampoerna (Rp 49 billion), Cahaya Kalbar (Rp 38 billion), Anwar Sierad (Rp 26 billion), Bimantara Citra (Rp 21 billion), Mayora Indah (Rp 20 billion) and Berlian Laju Tenker (Rp 20 billion). (alo)