Political factors to reign again in stock mart: Analyst
JAKARTA (JP): Trading on the Jakarta Stock Exchange (JSX) will be dictated by the domestic political situation this week, with investors fearing that instability could arise during the President's two-week overseas trip, according to securities analysts.
They said lingering fears of a military coup and continued sectarian violence in Maluku would steal a great portion of investors' attention this week, thus weighing negatively on JSX trading.
President Abdurrahman Wahid, or Gus Dur as he is popularly called, left Jakarta on Friday to visit 13 European and Asian countries, despite rumors that a group of military officers were trying to take over the government. However, the rumors later died down.
Meanwhile, fresh violence erupted in Central Maluku for a few days late last week, leaving 17 people dead and several injured.
Maluku has been hit by clashes between Muslims and Christians since mid-January last year. More than 2,000 people have died and hundreds of thousands more have fled their homes.
"The market was not good last week due to political concerns, it will be the same this week," one analyst said over the weekend.
Nevertheless, the Consultative Group on Indonesia's planned meeting in Jakarta on Tuesday and Wednesday, to discuss the government's proposal for new loans to cover its 2000 budget deficit, would likely give positive impact on the market.
Viewing the market more optimistically, Budi Ruseno from Bhakti Investama said there were unpleasant rumors leading up to Gus Dur's absence, but when such rumors prove wrong the market this week would be bullish.
"There have been mixed news, political and fundamental ones, about a lot of things at least for the past week," Budi said.
He said rumors about a military coup, even though they had proved baseless, remained to be some concern to some investors.
Besides the rumors, corporate announcements and takeover news also triggered active trading of shares in several publicly listed companies last week. Budi believed such information would continue to affect trading of second-layer stocks.
He said the swift change of information about the fundamentals of a number of shares traded on the JSX boosted market liquidity.
Meanwhile the rupiah, currency dealers said, would also be affected by concerns over Gus Dur's trip abroad this week.
They said lingering fears of a military coup had made them uneasy holding rupiah and to some extent would continue to do so.
The JSX composite index decreased by 4.5 percent to close at 634.66 points last week, from 664.69 the previous week.
Daily average transaction value dropped to Rp 1.12 trillion last week, compared to Rp 1.97 trillion the previous week.
The daily average turnover was down slightly to 1.35 billion shares last week from 1.33 billion shares the previous week.
Last week's top gainers were PT Asuransi Ramayana, whose shares increased by 56.52 percent, PT Transindo Multi Prima by 45.66 percent and PT Multipolar by 20 percent.
The week's big losers were PT Asuransi Harta Aman Pratama, whose shares fell by 33.33 percent, PT Clipan Finance Indonesia by 27.03 percent and PT Sumi Indo Kabel by 25.71 percent.
The top brokerage firms by transaction value were PT Danareksa Sekuritas with Rp 491.42 billion in transactions, PT Trimegah Securindolestari with Rp 418.11 billion and PT Asjaya Indosurya Securities with Rp 391.06 billion.
The rupiah depreciated 1.6 percent to close the week at 7,400 against the U.S. dollar, compared to its 7,280 close the previous week. (udi)