JSX to remain active as investors return this week
JAKARTA (JP): Trading on the Jakarta Stock Exchange (JSX) is expected to remain active this week as more investors will be reentering the market after the year-end holiday, stock analysts said over the weekend.
They also said that shares of Lippo Group companies would continue to dominate the market as the group would most likely continue to campaign for its planned Internet business.
Lukman Hakim from PT Isthetmar Finas Securities said the Lippo Group's Internet business campaign -- particularly the one by Lippo Life -- was the main effort to increase the concerned company's share price prior to its planned rights issue.
"It is normal for companies in Indonesia to push their own share price up artificially prior to a planned rights issue," Lukman said.
Lippo Life shares were the most actively traded shares last week. Its shares contributed almost one-third of the total daily trading volume on JSX for the last two days of last week.
JSX traded some 2.7 billion shares daily for the last two days of last week, 30 percent of which were Lippo Life shares.
Many companies want to do business through the Internet, and this is an effective weapon for the concerned companies to increase their share prices, according to Lukman.
"All technology-related shares are going up. The prices are just going up like crazy, they're becoming overvalued," he said.
Lippo Life shares, with a book value of Rp 60 as of September 1999, managed to close the week at Rp 700 last week, Lukman said.
Another analyst at a local securities firm said this week would be another active week and Lippo Group shares as a whole would again lead the market liquidity.
"An active market is good for the index. The JSX (composite) index will certainly benefit from it."
He added that the composite index would rise toward the 750 level in the first phase of its journey toward the much talked- about 1,000 level on the strong January market effects, in which most investors chart their investment plans for the year.
Lukman Hakim agreed that the composite index would strengthen this week, but reminded companies to stick to their stated corporate plans.
It is expected that companies which boasted about their Internet business plans but which would not show any early evidence of realizing the plan subsequently would go bust as a result.
"Shares prices will go up on hearing news of the nice-to-hear plan, but then they may drop if the market hears no follow-ups of the plan," he said, adding that this would affect the index.
Analysts said the market would continue to watch development in the U.S. market, especially toward early February when the U.S. Federal Reserve will announce the level of benchmark interest rates.
U.S. Federal Reserve chairman Alan Greenspan hinted strongly late last week that he would pose a more friendly and less aggressive approach toward increasing interest rates.
The JSX composite index increased slightly to close the four- day trading week at 690.89 points last week, from 688.52 the previous week.
Its daily transaction value increased to Rp 1.97 trillion last week, compared to Rp 1.24 trillion the previous week.
The average daily turnover rose to 2.25 billion shares last week from 979 million shares the previous week.
Last week's top gainers were PT Clipan Finance Indonesia, whose shares rose 78.95 percent, PT Putra Surya Perkasa (75 percent) and PT Asuransi Dayin Mitra (68.18 percent).
The week's big losers were PT Bayer Indonesia SB, whose shares fell 31.97 percent, PT Astra Graphia (30.73 percent) and PT Metrodata Electronics (26.19 percent).
The top brokerage firms by transaction value were PT Vickers Ballas Tamara with Rp 838.8 billion in transactions, PT Danareksa Sekuritas (Rp 677.3 billion) and PT Trimegah Securindo Lestari (Rp 533.8 billion).
The rupiah depreciated about a half percent to close the week at 7,210 against the U.S. dollar, compared to its 7,167 close the previous week. (udi)