JSX projected to remain flat due to wait and see attitude
JSX projected to remain flat due to wait and see attitude
JAKARTA (JP): The Jakarta Stock Exchange (JSX) is likely to remain stagnant this week as many fund managers need more time to evaluate their portfolio investments in Indonesia.
"The continuing stagnant performance of the JSX over the last three weeks could be a signal of cyclical weakness rather than of temporary negative issues," the president of PT Inter Pacific Securities, L.G. Rompas, told The Jakarta Post.
Many fund managers, according to Rompas, may have settled upon the end of March as the time to evaluate their portfolio position.
He said that other reasons for fund managers' wait-and-see attitude are the forthcoming presidential election in the United States, the new Indonesian budget year effective today and the anticipation of state-own companies' initial public offering.
"Fund managers might have foreseen a possibility of interest rate cuts following the realization of the new budget," he said.
Rompas said that during the first week of April, many public companies will publish their financial reports. But stock analysts will need one or two weeks more to give recommendations based on their own projections.
"Therefore, the market is likely to be stagnant next week, except for some significant issues like a cut of the Fed rate that may emerge within the week," he added.
The JSX share prices closed 0.1 percent lower last week with only four days of trading. The market was closed on Friday, the last working day of the 1995/1996 fiscal year, because the central bank, Bank Indonesia, closed clearing facilities.
The composite index closed the week (on Thursday) at 585.71 points, down from the previous week's close of 586.02 points.
Total trading
Total trading value reached Rp 1.1 trillion (US$487 million) with 463.4 million shares changing hands.
The prices of 94 stocks remained stagnant, while 80 advanced and 62 declined, as compared to last week when 91 stocks were stagnant, 79 gained and 66 dropped.
Foreign transactions saw a net selling of Rp 3 billion.
JSX last week saw a domination of Lippo Group's stocks, including Lippo Securities, Lippo Bank, Lippo Pacific Finance, Lippo Land Development and Lippo Life Insurance.
Except for Lippo Bank, dealers were uncertain on the movement of other Lippo shares during the week, such as Lippo Life, Lippo Pacific and Lippo Land.
Lippo Securities, which closed the week 33 percent higher at Rp 2,850, was among the top 10 stocks in terms of volume and value with 35.6 million shares traded at Rp 87.2 billion.
Lippo Bank was also actively traded with 9.6 million shares changing hands at Rp 43.9 billion.
An analyst said that Lippo Bank became attractive after the bank announced higher than expected profits in the middle of last week.
Lippo Bank's reported pretax profits of Rp 137 billion surpassed the expectation of Rp 130 billion.
Among the top 10 gainers last week were Kurnia Kapuas UGI which was up 57 percent, IKI Kabel up 37 percent, Lippo Pacific Finance 35.7 percent, Lippo Securities 33.7 percent and Ometraco Corporation 30 percent.
Andayani Megah of the Gajah Tunggal Group was among the top losers which closed the week 11.8 percent lower at Rp 1,675 due to disappointing net profits. (08)