JSX stocks expected to rebound late this week
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) are likely to rebound late this week following last week's heavy correction, with selective buying expected to happen on first liners, analysts says.
"I think investors have shown a buying interest today, which indicates a potential rebound next week," an analyst from ING Baring Securities told The Jakarta Post here on Friday.
"There is a sign that the market will consolidate next week while certain stocks are estimated to perform strongly," the analyst added.
He said there is no big news expected this week while several issues, including a potential hike in U.S. interest rates, will not affect the market.
"Those issues are already accommodated in the prices."
He, however, estimated the market is still looking for a new direction today. "It's because the weakening performance of our market this week is also in tune with a downward trend in the regional markets, meaning that the JSX needs to see how those markets perform."
"I think the market may still go down in the first few days while a technical rebound is expected to start in midweek, suggesting that it will be the right time to buy," a PT Lippo Securities executive, who preferred anonymity, told the Post over the weekend.
Several analysts viewed that although there will be two companies to conduct initial public offerings this week, market performance would not be deeply affected by the offerings.
"If prices go down, it will be nothing to do with the offerings," an analyst said, adding that "investors should have secured fresh funds in previous weeks and not today".
JSX will see offerings this week from PT Citatah and PT London Sumatra Indonesia, with an estimated combined initial public offering size of about Rp 285 billion (US$121 million).
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JSX share prices were heavily corrected by 3.3 percent last week, with the exchange's composite index closing the week 20.4 points lower at 592.36 after reaching last week's low of 581.52.
It was also the first time since April that the composite index dropped to below its 600-point support level.
Analysts viewed that a sharp drop in midweek, when the composite index plunged by 2.4 percent to 581 points on Thursday, was mainly due to the overvalue of stocks.
The price decline in the week's opening resulted from several factors, including fear of an interest rate increase in the United States and concentration on new initial public offerings.
"Investors may have perceptions that blue chip companies could not afford to gain earnings higher than what was predicted with current macro economic conditions. It suggests that those stocks are fundamentally already expensive," an analyst from PT Peregrine Sewu told the Post.
Foreign sell transactions amounted Rp 792 billion last week against buy transactions of Rp 850 billion, while total transactions reached 391 million shares worth Rp 1.16 trillion.
Businessman Johanes Kotjo was last week rumored to have said he might acquire PT Sona Topas Tourism Industry.
The rumors helped push Sona Topas' share prices by 10 percent to close the week at Rp 800, with 22 million shares changing hands at Rp 48 billion.
Rumor two weeks ago that Kotjo might take over Super Indah Makmur drove the share price up by 8 percent to Rp 3,525 last week, although the company's management denied knowing anything about the rumor.
Super Indah was recorded again on the list of top stocks both in volume and value with 11 million shares traded at Rp 38 billion.
There was another rumor that a new shareholder in Bank Mashill Utama might have gradually reduced its position in the bank.
Bank Mashill recorded total transactions of 21 million shares worth Rp 48 billion last week.
An analyst who asked not to be named told the Post that a consortium headed by Tito Sulistio, a commissioner of the Surabaya Stock Exchange, might have sold its position.
"I think President Soeharto's second daughter Titik Prabowo should have felt embarrassed about having her name on the news about a consortium which have failed to take over Bank Mashill," the analyst added.
Mashill share prices managed to increase by 4 percent to Rp 2,250 last week.
The top stocks in value last week were Telkom (with a total trading value of Rp 137 billion), followed by Ciputra Development (Rp 130 billion), HM Sampoerna (Rp 71 billion), Bank Mashill (Rp 48 billion), Indosat (Rp 43 billion), Matahari (Rp 38 billion), Super Indah (Rp 38 billion), Kalbe Farma (Rp 37 billion), Apac Centertex (Rp 36 billion) and Bank Internasional Indonesia (Rp 34 billion). (alo)