Leap year fears might slow down stock trading

JAKARTA (JP) Fears of possible computer glitches on Feb. 29, the date of the extra day in the new millenium's first leap year, might slow down trading on the Jakarta Stock Exchange (JSX) this week, securities analysts say.

"There are some worries, especially from foreign investors, approaching Feb. 29," said Yuzar Nazaruddin from Ficor Sekuritas Indonesia over the weekend.

He added, however, that such fears centered on Y2K related computer glitches should not have reappeared as it had already been proven that Indonesia could handle Y2K problems.

The has JSX scheduled a day off for Feb. 29, falling on Tuesday, to avoid any possible disruption of stock trading.

"We have that day printed as a holiday in our calender. It has been planned out well," said an official from JSX. But many investors plan to leave the market before that date.

A leap year, which falls every four years, has 366 days with Feb. 29 as the extra day. Many investors fear that the exchange's computerized system does not accommodate such a change.

Yuzar said hopes for a technical rebound remained high despite fears of possible computer glitches.

"Share prices are getting cheaper. There is nothing wrong with starting selective buying next week," he said over the weekend.

Many blue chip stocks dropped last week amid speculation that the U.S. Federal Reserve would raise its interest rates again, Yuzar said.

"Next week will be somewhat mixed as noises in domestic politics have quietened down with the good health of President Abdurrahaman Wahid now certain," Yuzar said over the weekend.

But Yuzar stressed that the clear signals of the market's direction for this week would be seen after the JSX leap year holiday on Tuesday.

An analyst from a foreign securities company shared Yuzar's view on the fear surrounding the millennium's first leap year, but added that this week's market would also be affected by acumulative negative sentiments held by investors about the capital market authorities being too lenient in their supervisory role.

"We've had cases where the market authority didn't do anything to some irresponsible companies that were planning to do some funny things on the JSX to fool public investors and get an easy profit," he said.

There was also an insurance company that simply switched its core business to another after managing to remove all its insurance portfolio from the company's books to an external party, he said.

"The capital market authority has to do a lot more to protect the interest of the public investors," he said.

Commenting on the issue, Yuzar downplayed the fear and said public investors now acted much more wisely than before.

Besides companies that did not show transparency and good corporate governance would be soon left by public investors, he added.

"Public investors are now smarter than before. They are avoiding those stocks from questionable companies," he said.

The rupiah, said currency dealers, should receive positive news this week from the planned sale of the government stake in auto maker PT Astra International, as foreign buyers would need a large amount of rupiah to make the purchase.

"We should see some foreign players selling dollars for rupiah on behalf of any potential buyers of Astra next week," he said.

The rupiah stabilized at last week's close of 7,408 against the U.S. dollar, compared to 7,405 the previous week.

The JSX Composite Index dropped 5.2 percent last week to close at 568.55 points, down from 599.57 the previous week. The daily average transaction value decreased to Rp 622.57 billion last week, compared to Rp 933 billion the previous week.

The daily average turnover also decreased to 433 million shares last week from 741 million shares the previous week.

Last week's top gainers were PT Trimegah Securities, whose shares increased 34.17 percent, PT alter Abadi (33.33 percent) and PT Unibank, which rose 25 percent.

The week's big losers were PT Lion Mesh P., whose shares fell by 45.45 percent, PT Cipendawa Farm Enterprise (29.03 percent) and PT Igarjaya, which experienced a 20 percent fall.

The top brokerage firms by transaction value were PT ABN Amro Asia Securities with Rp 499.19 billion in transactions, PT Vickers Ballas Tamara (Rp 367.35 billion) and PT Credit Lyonnais Capital Indonesia with Rp 301.07 billion in transactions.

Meanwhile, the treasury bonds launched on the Surabaya Stock Exchange (SSX) early this month did not book any transactions last week.

In the previous week it booked transactions worth Rp 6 billion, priced at 96 percent of the bond face value.

The SSX traded Rp 2.16 trillion of the total Rp 255 trillion treasury bonds issued by the government last year to finance the recapitalization costs of the country's ailing banks. (udi)