Politically related stocks remain preferable: Brokers

Politically related stocks remain preferable: Brokers

JAKARTA (JP): Local stock prices continued to make mild gains
yesterday in moderate trading, with local investors still
favoring politically connected stocks, stockbrokers said.

The Jakarta Stock Exchange (JSX) Composite Index rose 0.2
percent to 512.14 points from 510.78 the previous day, with
trading volume reaching 682.39 million shares worth Rp 524.36
billion (US$52.43 million).

"There was nothing special in the market except that local
investors continued to buy selective stocks related to high
profile business groups," a dealer with joint venture securities
said.

He was referring to Citra Marga Nusaphala Persada, Astra
Internasional and Bimantara Citra and Bhakti Investama which were
actively traded by local investors and continued to make gains.

Toll road builder Citra Marga, controlled by President
Soeharto's eldest daughter Siti Hardijanti Rukmana, who is also
Minister of Social Affairs, rose from Rp 25 to Rp 600.

Astra Internasional, where Soeharto's close confidant Muhammad
(Bob) Hasan, who is also Minister of Industry and Trade, has
significant stakes, rose from Rp 75 to Rp 1,900

Bhakti Investama, controlled by Soeharto's daughter Siti
Hediati Prabowo, rose from Rp 200 to Rp 1,500, and conglomerate
Bimantara Citra, owned by Soeharto's son Bambang Trihatmodjo,
remained unchanged at Rp 1,025.

Brokers said local security houses like Danareksa Sekuritas,
Lippo Securities and Bhakti Investama were making quite large
buying orders for the stocks, causing the benchmark price index
to rise marginally higher in late trading yesterday.

They said foreign investors were still on the sidelines,
waiting for the government's new measures to shore up the
rupiah's value and revive the country's crippled economy.

"The market was a bit disappointed by the fact that the
government did not announce any measures following the first
meeting of the new cabinet," an analyst with Mashill Jaya
Securities said.

He added that the market had expected the government would
have decided on its controversial plan to adopt the currency
board system, which would peg the rupiah to the U.S. dollar.

Coordinating Minister for Economy and Finance Ginandjar
Kartasasmita said yesterday the government had not decided
whether to peg the embattled rupiah.

The government had wanted to peg the rupiah at between Rp
5,000 and Rp 6,000 to the dollar in a bid to stabilize the
currency, whose 70 percent fall since last July has wreaked havoc
on the country's economy.

But Ginandjar said the peg was one alternative among the
options for staging an economic recovery.

The indecisiveness over the currency board issue also made the
rupiah weaken slightly against the U.S. dollar, currency dealers
said.

The rupiah was trapped in range transactions at the Rp 10,000
level.

Spot rupiah closed at Rp 10,300 against the American dollar in
moderate trading, lower than its close at Rp 10,200 the previous
day.

"Most operators did not want to open any new position amid the
uncertainties, especially when the government has not decided on
what steps (will be taken) to help the beleaguered rupiah," a
local private bank chief dealer said.

He said the market expected the government to unveil measures
this week to overcome the economic crisis. (aly)