Local share prices to remain volatile
Local share prices to remain volatile
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
are expected to remain volatile this week as investors wait for
details of the financial aid package from the International
Monetary Fund (IMF).
Securities analysts and brokers said uncertainty over the aid
package from the IMF would make stock trading activities look
featureless.
"I think details and the type of financial package from the
IMF will be a key factor in the stock and money market," David P.
O'Neil, vice president of research at Lippo Securities, said.
He said most investors still had a wait-and-see attitude
toward the financial package from the IMF, the World Bank and the
Asian Development Bank.
"It's too premature to say the market has already recovered.
Investors don't know yet what and how much financial assistance
(will come) from the IMF," O'Neil said.
The Indonesian government announced last week that it was
seeking financial help from the IMF, World Bank and Asian
Development Bank to shore up the rupiah and its currency crisis.
IMF delegates are in Jakarta to discuss the government's
financial aid obligations. No details of the financial aid have
so far been announced but analysts speculate that assistance will
include standby loans worth up to US$12 billion.
Visiting Japanese Vice Finance Minister for International
Affairs Eisuki Sakakibara said Saturday that the Japanese
government was ready to contribute to the aid package being
prepared by the IMF.
"Sakakibara's encouraging statement sent positive signals to
both stock and money markets," a local bank chief dealer said
over the weekend.
The rupiah, which fell below 3,700 to the U.S. dollar in early
trade Friday, recovered to 3,540/50 in the afternoon after
Sakakibara's encouraging statement.
The Japanese minister's full support of the IMF-led aid
package also contributed to the strengthening of share prices.
The JSX composite index rose 3.594 points, or 0.70 percent, to
close the week at 520.68.
The rupiah has lost over 35 percent of its value against the
dollar since early July.
Total daily average turnover declined about 26 percent to
340.9 million shares last week compared to 432.20 million shares
in the previous week.
Total daily average value fell 18 percent to Rp 416.51 billion
($119 million) last week compared to Rp 493.33 billion in the
previous week.
Securities brokers said the market was showing signs that
declining sentiment had bottomed out, with the rupiah
strengthening against the dollar and no further sharp falls in
the JSX composite index.
"Despite such optimism, the market will stay volatile for the
next few weeks," O'Neil said.
Most blue chip stocks closed mixed last week with
telecommunications firm PT Telkom falling by Rp 75 to close at Rp
3,625, Indosat by Rp 25 to Rp 8,975, Bank Internasional Indonesia
by Rp 75 to Rp 800, Bank Negara Indonesia by Rp 75 to Rp 775 and
Bank Dagang Nasional Indonesia by Rp 75 to Rp 550. Others went
up, with cigarette-maker Gudang Garam up by Rp 125 to Rp 9,100
and HM Sampoerna by Rp 200 to Rp 6,000. (aly)