Positive predictions made on JSX performance

JAKARTA (JP): Securities analysts project that share prices on the Jakarta Stock Exchange (JSX) are likely to be firm this week due to the easing of fears for a possible increase in U.S. interest rates.

They also viewed that the listing of several new stocks is also expected to give a boost to the market.

"It's very positive. I think foreign investors have come back on blue chips today but their participation is likely to be very limited next week," an analyst with a London-based securities company told The Jakarta Post on Friday.

The analyst, who declined to be named, said that despite a relatively positive situation on global equity markets, foreigners are still uncertain whether to make big deals here because they consider that Indonesia's political situation is still unstable with the continuing demonstrations by the supporters of ousted Indonesian Democratic Party chief Megawati Soekarnoputri.

Megawati was ousted in last month's government-backed congress of the party in Medan.

"Many people are still down there in the streets. So, how can we say that it's already stable," said the analyst.

"Early this week, investors were concerned about a possible increase of U.S. interest rates. They cut down their activities while waiting for Mr. Greenspan's statement before the U.S. Senate on Thursday. But unlike other market in the region, the JSX didn't decline too much on the issue," Lippo Securities' managing director, Kelvin Lee, told the Post.

Alan Greenspan, the chairman of the U.S. Federal Reserve, was reported by Reuters as telling the U.S. Senate Banking Committee that the Fed will raise interest rates if needed to head off inflation.

Foreign investors were mostly sidelined in the first few days last week as they were afraid that the Fed would increase interest rates in line with a weakening unemployment figure, which hit its lowest level in the last six years in June.

"The market sentiment is good and its performance will remain strong despite a bit of profit taking activities likely to happen next week," he added.

"I also expect that the listing of PT Surya Dumai, PT Fiskaragung and PT Ramayana will also boost investors' activities," he added.

"Foreign investors are coming back no matter that the fresh funds they bring in are still limited," Deny Riyadi from PT Asian Development Securities told the Post.

Those analysts, however, do not expect that the share prices will go up significantly.

Rumors

Last week, the JSX's total trading volume reached 616 million shares valued at Rp 1.3 trillion, against the previous week's figures of 478 million worth Rp 1.1 trillion.

Share prices crept up by only 0.02 percent on fears of the hike of U.S. interest rates, with the composite index increasing by 0.127 point to 580.07 at the week's close.

The composite index dropped five points on Monday following a heavy correction on the Wall Street but then recovered on Tuesday.

Lee said that several big deals last week were flavored by rumors.

Property company Duta Anggada was recorded as the top traded stock in value and volume with 67 million shares changing hands worth Rp 147 billion on rumors that it would sell a plot of land behind Chase Plaza in Central Jakarta to a foreign buyer.

Another property company, Dharmala Intiland, was also boosted by a rumor that it might have arranged a merger with PSP Group.

Dharmala recorded a trading volume of 15.7 million shares worth Rp 34 billion during the week.

Meanwhile, the shares of a textile company, Pan Brothers Tex, which signed a cooperation agreement with Batik Keris Group in the previous week, went up again by 65 percent to Rp 1,950, with trading volume reaching 47 million shares valued at Rp 85 billion.

In the last two weeks, Pan Brothers share prices have already increased by 160 percent.

Other top 10 stocks in trading values were Telkom (with a total trading value of Rp 91 billion), Lippo Securities (Rp 57 billion), HM Sampoerna (Rp 46 billion), Indosat (Rp 37 billion), Bank Internasional Indonesia (Rp 36 billion), Semen Gresik (Rp 34 billion) and JIHD (Rp 34 billion).

The closing prices of several big shares on the rise were Barito Pacific Timber (Rp 1,750 against the previous week's close of Rp 1,425) Gudang Garam (Rp 9,675 against Rp 9,125), Indosat (Rp 8,075 against Rp 7,525) and Indah Kiat Pulp & Paper 9Rp 2,200 against Rp 2,150). (alo)