Local stock prices likely to consolidate this week
Local stock prices likely to consolidate this week
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
are expected to consolidate this week after making a 10 percent
gain last week, securities analysts have said.
The analysts said foreign funds might still enter the market
but profit taking by local investors would make most prices
stagnant.
Head of research at Pentasena Securities Mohammad Syahrial
said most investors had not decided whether to make any long term
investment in the country's financial market.
"This is why many investors are taking profits within just a
few days," he said.
But other analysts said the benchmark Composite Index would
not fall below the psychological 500-point level this week even
though the trading outlook was not so promising.
Syahrial said some investors would take profits if the main
price index hovered between 530 and 550 points this week.
"If the index goes down to hover between 500 and 530 points,
more investors will enter the market again," he said.
According to analysts, the strengthening of the rupiah was
crucial to the stock trading outlook.
The rupiah closed stable at 9,400/9,600 against the U.S.
dollar Friday following central bank intervention, up from its
close of 10,300 last Monday.
Stock analysts said the announcement of the government's new
data on private corporate debt, which last week helped revive
trading activities, would make investors more confident about the
economy.
Chairman of the Corporate Foreign Debt Settlement Team, Radius
Prawiro, announced Friday that private Indonesian companies
accounted for only US$23.07 billion of the $73.96 billion in
foreign debts owed by the private sector with the remainder owed
by foreign firms and joint venture companies.
"The new data tells us that the private sector problem is not
as serious as we thought," one analyst said.
Other analysts said that some foreign investors were actively
trading in the market but foreign players were mostly still
reluctant to make big orders due to uncertainties in the
country's political situation.
"Most investors who entered the market over the past few weeks
were short-term investors. They are still cautious about the
country's long term prospects especially the political
situation," Syahrial said.
Riot
An angry mob attacked shops owned by ethnic Chinese in the
main shopping street of Bima town, West Nusa Tenggara on Saturday
due to rising prices of basic goods.
Savage protests about the soaring prices of staple goods
erupted in several towns on the main islands of Java and Sulawesi
before and after the Idul Fitri holiday.
"Riots like this will effect most business activities in the
coming weeks especially prior to the Presidential election in
March," an analyst with a joint venture securities firm said.
Members of the People's Consultative Assembly will convene
from March 1 to March 11 to elect a new president.
The JSX Composite Index ended 21.94 points higher to close at
535.42 last week from 485.93 the previous week.
The daily average turnover rose 132 percent to 789.62 million
shares changing hands last week against 339.26 million shares the
previous week.
The daily average value rose 48 percent to Rp 791.61 billion
($83.32 million) last week from Rp 532.22 billion the previous
week.
Stock brokers said last week's turnover was higher than the
previous week because there were only three trading days the
previous week.
Most regional markets including Indonesia were closed on Jan.
28 and Jan. 29 to celebrate the Lunar New Year holiday and Idul
Fitri holiday.
Blue chip stocks ended mixed last week with state-owned
telecommunications firm Telkom falling Rp 75 to Rp 4,275 and Bank
Internasional Indonesia Rp 50 to Rp 575. Bank Negara Indonesia
and Bank Dagang Nasional Indonesia remained unchanged at Rp 600
and Rp 325 respectively.
Satellite operator Indosat rose Rp 600 to Rp 16,800, cigarette
maker Sampoerna Rp 250 to Rp 5,625 and Gudang Garam Rp 2,150 to
Rp 14,200. (aly)