JSX rebounds despite rising prices, rates

JSX rebounds despite rising prices, rates

JAKARTA (JP): The Jakarta Stock Exchange (JSX) saw a technical
rebound last week, despite higher inflation and an increase in
interest rates on money market securities (SBPU).

The JSX Composite Index rose 10.6 points (2.5 percent) to
close at 427.01 last Friday.

Active foreign buying boosted market sentiment as local
investors, who had been waiting for a buying opportunity, rushed
into the market, snapping up undervalued stocks across the board.

Foreign investors focused on a small range of mostly large
blue-chip stocks. By Friday, however, the market saw some profit-
taking activities, as Bank Indonesia, the central bank, raised
the interest rates on its SBPUs by 50 basis points in the
morning. This is expected to be followed by increases in deposit
rates which could be detrimental to the stock market.

The announcement on the higher inflation rate of 1.69 percent
for April, or 10.02 percent on a year-on-year basis, was another
piece of bad news for the market. However, the U.S. Commerce
Department released figures showing that the U.S. economy had
slowed down in the first quarter of this year.

In the short term, we expect another wave of correction,
although some companies planning to announce their results this
week may provide some support to the market. Multi finance
company Panin Overseas Finance, expecting to make a public
offering of 12.5 million shares at Rp 1,500 each this week, may
face difficulties under the prevailing market conditions.

Activities of domestic investors were seen across the board,
although they focused mainly on speculative property stocks.
Counters actively traded by them included BDNI, Smart, Dharmala
Intiland, Gadjah Tunggal, Lippo Land, Barito, PSP, Tjiwi Kimia,
BII, Duta Anggada, JIHD and Argha Karya.

Foreign players were active mostly on blue-chip counters such
as Gadjah Tunggal, BDNI, BII, Barito, Tjiwi Kimia Astra
International, Smart, Dharmala Intiland, Duta Anggada, Lippoland,
Indocement and Indofood.

Kabelindo Murni's 1-for-1 bonus issue was listed last week.

Average daily turnover on the regular board increased to 15.11
million shares worth Rp 45.18 billion (US$20.27 million) from
12.51 million shares worth Rp 35.20 billion in the previous week.

Last week's total turnover increased to 136.21 million shares
valued at Rp 443.19 billion from 129.35 million shares valued at
Rp 421.90 billion in the previous week.

Some of last week's best performers were Unilever (up Rp
1,000), BII (up Rp 725), HM Sampoerna and Mayora (each up Rp 600)
and Ciputra Development (up Rp 575). The biggest losers were
Modernland Realty (down Rp 725), KIA (down Rp 700), Putra
Sejahtera (down Rp 525), Panin Life (down Rp 450) and IKI Kabel
(down Rp 250). Gainers outnumbered losers by 61 to 44, while 38
counters remained unchanged.

-- Sigma Batara