Leap year fears might slow down stock trading

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)