JSX stocks to remain stable on lack of funds

JAKARTA (JP): The Jakarta Stock Exchange (JSX) is likely to perform softly this week on the lack of fresh foreign funds as investors are expected to be reluctant to make big deals, analysts said.

Securities analysts estimated that although rumors related to President Soeharto's health will completely fade away with his return on Saturday, the domestic political issue will remain a key factor influencing this week's trading directions.

On the technical viewpoint, analysts said that chances for a further price increase for blue-chip shares are very limited following their good performances last week.

Share prices on the JSX gained nearly 1 percent last week amid positive reports on the President's health.

The market's benchmark Composite Index inched up 4.89 points to close at 579.94 on Friday after a significant drop on Monday.

"The JSX might see strong performance of selected third liners on individual issues like a takeover rumor next week," a dealer with a Japanese-based brokerage said.

"I have read some reports saying that funds managers are now downsizing their Indonesian portfolios," an executive of PT Asian Development Securities, Ikeda, told The Jakarta Post over the weekend.

Fears over the possible heating up of the political temperature ahead of next year's general election are most likely the main reasons behind the cut in the foreign portfolios, he said.

Ikeda, however, said that the impact of the weakening performance on Wall Street which in the last two weeks affected most Asian markets, will be minimal.

"I also believe that there must be some new cash outflow from the United States. But I'm not so sure whether it will flow to Indonesia and when it comes," he noted.

Another analyst from a foreign securities company said the fear of a possible increase in domestic interest rates will also add to this week's gloomy outlook.

The analyst said the expected increase in U.S. interest rates next month will automatically push up domestic interest rates.

Ikeda also pointed out that the disappointing performance of some newly listed companies in the previous two weeks discouraged trading activities of most fund managers.

"I am not sure as to whether the market will go up or down. but I would say that with only local speculators chasing second liners and third liners, I do not expect any significant price increase on the JSX," he said.

Trading

Last week's total trading volume declined to 478.33 million shares worth Rp 1.12 trillion (US$478 million) from 589 million shares valued at Rp 1.9 trillion in the previous week.

Share prices were generally stable after a slight decline a week earlier when many investors were engaged in cut-loss trading over their worries over President Soeharto's health.

Securities analysts said that the trading sentiment improved on Monday after Minister/State Secretary Moerdiono said the President was given a clean bill of health and his trip to Germany was only for a checkup.

Trading further gained confidence on Thursday and Friday after the German doctors confirmed that there was no problem with Soeharto's health.

"Share prices were mostly recovering even though many foreign investors were sidelined on the trading floor on fears of an increase in U.S. interest rates," a stock analyst said.

Last week's top gainer was Pan Brothers, which rose by 56.67 percent to close at Rp 1,175 on reports on its tie-up with Batik Keris, also a textile-related company. The second top gainer was Sarasa Nugraha (up 50 percent), with Asiana IMI Industries (up 24.5 percent) in the third slot, followed by Dharmala Sakti (up 20.34 percent), Voksel Electric (up 20 percent), Putra Surya Perkasa (up 18.64 percent), Dharmala Intiland (up 17.39 percent), Putra Sejahtera (up 16.13 percent), Andayani Megah (up 15.56 percent and Sucaco (up 15.46 percent).

The top losers were Inter Delta (down 23.61 percent), Rimba Niaga (down 20 percent), Hotel Prapatan (down 13.16 percent), Panca Wirtatama (down 11.76 percent), Asuransi Dayin Mitra (down 10.34 percent), Bank Surya (down 9.43 percent), Sekar Laut (down 9.09 percent), Kalbe Farma (down 9.05 percent), Branta Mulia (down 8.33 percent) and Intan Wijaya (down 7.5 percent). (alo/hen)