Local stock trading seen to remain quiet

Local stock trading seen to remain quiet

JAKARTA (JP): Trading activities in the local stock market are
again expected to remain quiet during this four-day trading week
as most investors are taking their year-end holidays.

Securities analysts said that share prices in the battered
local market, which had been declining in the lead-up to
Christmas last week, would possibly slide further.

"Investors are mostly on their holidays so the market will be
really quiet in the coming weeks," Vonny Juwono, an institutional
sales broker with Trimegah Securindolestari, said.

The analysts said that offshore fund managers, who had been
expected to re-enter the local market for window dressing
operations in their efforts to prop up their asset portfolios
before the close of the year, had remained out of the market.

They said that foreign investors were no longer tempted to
prop up their portfolio investments in the local market because
of a lack of fresh incentives and unresolved economic and
political crises at home.

"Window-dressing would only take place if the country was in a
normal condition. However, the country is in a dire situation, so
there are no foreign investors expected to enter the market," the
head of research at Mashill Jaya Securities, Edhi Widjojo, said.

Stockbrokers and currency dealers said that trading volume in
the local financial market had dwindled sharply ahead of
Christmas day last week, with only 105 million shares of stock
worth Rp 80.76 billion being traded on Thursday, while the
rupiah's trading volume had dipped to less than US$50 million.

Currency dealers and brokers said that most market
participants and investors had stayed clear of the local
financial market during the long year-end holiday.

They said that the decline in trading volume in the stock
market and the currency market would continue until investors and
market participants found fresh incentives to enter the battered
financial market.

"Trading activities will continue to remain quiet this week
and until early January," Trimegah's Vonny said.

Brokers said that bearish sentiment in the local market would
likely force the benchmark price index in the local bourse to
fall below the key 400 point level in the upcoming week.

"The main index might hit its support level of 390 points,"
Vonny said.

The Jakarta Stock Exchange's (JSX) main price index closed
2.10 points lower at 401.85 on Thursday of last week compared to
the 403.96 closing the previous week.

The daily average turnover fell 35 percent to just 151.44
million shares changing hands last week compared to 235 million
shares the previous week.

The average daily transaction value declined by 44 percent to
Rp 149.63 billion ($19.18 million) last week compared to Rp
269.74 billion the previous week.

Financial analysts said that the rupiah, which closed slightly
lower at 7,850 on Thursday, would continue to be traded in a
narrow range of between 7,500 to 8,000 during this short trading
week.

Currency dealers said that offshore market participants did
not want to build any fresh positions in the lead-up to the end
of the year because they were still in a holiday mood.

Also, there was no fresh impetus to lure them back into the
local currency market.

"If there is any movement in the rupiah, it will be driven by
dollar bids from domestic banks," a chief dealer with a joint
venture bank said.

Currency dealers said that the rupiah lost ground to close at
7,850 on Thursday due to fresh dollar bids by local commercial
banks that dragged down the rupiah.

"If domestic banks bid the dollar, then the rupiah will likely
fall further," the dealer said.

But dealers said that even if there was any movement, trading
volume would be very limited. (aly)