Positive sentiment seen on JSX stocks this week
JAKARTA (JP): Several analysts predict a positive performance for the Jakarta Stock Exchange (JSX) this week, but believe share prices would move up in a narrow range on an expected profit- taking and consolidation mood on selected big companies.
"Market sentiment is definitely positive following Wall Street's gains. And I'm sure some more money is coming into the market," Lippo Securities' Managing Director Kelvin Lee told The Jakarta Post over the weekend.
Lee and other two analysts contacted by the Jakarta Post said in the short term JSX stock prices still had room to go up but at certain levels selective profit taking would occur.
They also predicted that several big companies including Telkom and HM Sampoerna were likely to consolidate following strong rallies last week.
Sampoerna share prices advanced Rp 2,350 (99.78 U.S. cents) last week to close at Rp 24,000, while Telkom rose Rp 450 to Rp 3,925.
Stocks of the two largest banks, Bank Dagang Nasional Indonesia (BDNI) and Lippo Bank, respectively gained Rp 300 and Rp 150 last week before closing the week at Rp 2,000 and Rp 3,550.
Commenting on what was going to trigger market sentiment, the analysts said that to some extent Wall Street would continue to drive Asian markets including the JSX, while on the domestic side there was nothing to worry about on the macro-economic and political fronts.
"But I'm just not so sure whether fund inflow will continue next week. I also doubt that a strong performance will last long after the listing of the state-owned Bank Negara Indonesia (BNI) 1946 late this month," a senior manager of Japanese based PT Daiwa Securities, Moto Murata, said.
Murata predicted BDNI stock would remain active this week despite expected profit-taking in the banking sector.
Meanwhile, Lee and Nurkhamid Akhmad, chairman of the Jakarta Brokers Club were optimistic that rallies on several bluechip companies will continue this week.
The analysts agreed the market's composite index would stay above the 600 level until the end of this month. But they said it would be difficult to hit the historic high of around 630 points in the remaining one and a half months of this year.
Nurkhamid said that before BNI's listing on the exchange, the market will get new funds as BNI refunds investors on Nov.21 because the initial public offering would certainly be oversubscribed.
Based on the latest positive trend, Lee said, the market will positively welcome several new issues later this year from Siread Produce, Glend Eagle Health Care, Bank Umum Servitia, Siantar Top and PIKO Bank.
Murata, however, hinted that the upward share price movement would not last long after BNI's listing (on Nov. 26) because fund managers would gradually reduce their activities in anticipation of the Christmas holidays.
"Buy-back"
The JSX recorded a very strong 5.5 price increase last week thanks to investor sidelining on the public offering of the country's largest bank, BNI.
The JSX composite index rose 31.36 points over the week to 602.02. Total trading volume reached 592 million shares worth Rp 1.2 trillion.
Foreign investors became net buyers with total buy transactions of Rp 865 billion against sell transactions of Rp 747 billion.
The three analysts said such a huge increase was bolstered by the availability of large amounts of idle funds which were previously secured to buy shares BNI's shares.
"BNI's offering is a little different from the offerings of other state-owned firms like Telkom. It is too difficult to get such a `hot' stock," Murata said.
"I would say that many investors are disappointed with BNI's offering," Nurkhamid added.
"It is noteworthy that investors had previously liquidated or even taken `cut-loss' action on several bluechips just to anticipate BNI's offering. But many of them failed," he said.
What was happening last week is best described as "buy-back" action or technical rebound for selected bluechips, said Nurkhamid.
The market received strong support from regional markets' positive sentiment in tune with the Wall Street's post-election gains, and positive domestic economic data.
"I would also say that it is the first time that foreign investors made a `heavy' return since the July 27-incident," Nurkhamid said.
The most active stocks last week were Telkom (with a total trading value of Rp 88 billion), BDNI (Rp 62 billion), Sampoerna (Rp 57 billion), Mas Murni (Rp 55 billion), Indosat (Rp 47 billion), Citra Marga (Rp 40 billion), Anwar Siread (Rp 39 billion), Daya Guna (Rp 36 billion), BII (Rp 35 billion) and Astra International (Rp 33 billion). (alo)