JSX stocks to remain stable on lack of funds

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)