Profit-taking to limit stock gains: Analyst
Profit-taking to limit stock gains: Analyst
Dadan Wijaksana, The Jakarta Post, Jakarta
The Jakarta stock index is expected to rise again this week
driven by the current positive sentiment, but gains would be
limited by an early "technical correction" after a hefty 4.8
percent surge last week, an analyst said.
Roberto Pardede, a stock analyst at PT Mandiri Securities,
told The Jakarta Post on Sunday that the overall market sentiment
would remain positive on the back of encouraging news on both
corporate and macroeconomics sectors.
"But we're going to see technical correction early on, but
then the (rising) trend of the index will continue. I think the
index will try to move closer toward 480 points," he said.
Last week, the Jakarta Composite Index jumped by 21.824 points
to 469.63, compared to the previous week's closing of 447.16.
The daily average volume also rose to 873.14 million shares
worth Rp 575.16 billion (US$68.1 million), as against 715.4
million shares worth Rp 424.38 billion the week before.
According to Roberto, the country's stable macroeconomics,
most notably Bank Indonesia's benchmark interest rate -- which
fell in last week's auction to 10.91 percent -- became the latest
reason for the rising confidence in the economy.
The central bank has been guiding the interest rate lower over
the past two years, thanks to the strengthening rupiah and a
benign inflation.
On the corporate front, Roberto was betting on recent positive
news from the country's largest telecommunication firm PT Telkom
to become the engine of the index's upward movement.
"The (financial) result should be encouraging for market
players. Telkom news alone, I expect, would be able to drive the
index up," he said.
On Friday, Telkom's annual shareholders meeting agreed to hand
out some 40 percent of the company's 2002 net profit as dividend
payment. The firm said it would provide dividends totaling Rp 3.3
trillion, or Rp 304.26 per share.
Meanwhile, in the currency market, the rupiah is also expected
to continue its appreciation trend against the U.S. dollar on the
back of continued capital inflows.
"We're seeing investors, mostly foreign players, continue to
buy the local unit to invest in the country's capital market. I
think this week won't be an exception," a currency dealer at a
local bank told the Post.
The capital inflow, he added, was made possible by the
country's stable macroeconomic indicators, but most notably was
triggered by the sale of Bank Danamon.
The rupiah last week closed stronger at 8,545 per dollar
compared to 8,675 the week before.
"But the rupiah's movement will be limited as the dollar will
gain from expected tax cut approval by the U.S. Senate, a move
that would boost confidence in the U.S. economy," he added.