Quarterly results may attract investors
JAKARTA (JP): An analyst with a Hong Kong-based securities company foresees the Jakarta Stock Exchange (JSX) performing softly this week on lack of fresh issues.
"I do not expect any significant price movements of stocks next week. What may ignite the market are strong first-quarter results and new share-issues," the analyst, who preferred anonymity, told The Jakarta Post here over the weekend.
"I would say that investors have already gotten bored with what is going on in the market. What they really need now are new stories," he added.
According to the analyst, some companies have already published their first-quarter results but failed to support the market because most reports are disappointing.
"We are looking forward to more positive reports. If it doesn't happen, we should wait for first-half results," he added.
"But as far as the transaction volume is concerned, I would say that the market is still strong," he said.
The managing director of PT Lippo Securities, Kelvin Lee, foresaw selective buying on first-liner and second-liner stocks to happen this week.
"I think analysts are now busy studying first-quarter results of companies to see if the results meet their forecasts. Based on analysts' research, foreign investors may start to selectively buy first-liner stocks or even second-liners," Lee told the Post.
"But I should say that the forthcoming weeks will be tough for third-liner stocks. Trading on the third-liner is going to be very quiet," he predicted.
He cited that another reason for investors' selectivity is the estimated large amount of funds to be raised by some companies through rights issues.
In a situation where many companies plan rights issue, investors may get worried whether to sell their positions or to take positions, he added.
Another analyst, who preferred to be unnamed, wondered if some planned initial public offerings would activate the market.
"It is because the size of those planned issues is too small," he said.
The three analysts agreed that the market will remain quiet this week.
The Capital Market Supervisory Agency said there might be one initial public offering to get the agency's approval at the end of this month. If it's true, then this weekend will see one public offering.
Another issue worth noting, according to Lee, is a new downtrend movement of domestic interest rates.
Quiet
The JSX saw another week of quiet trading last week due to less participation by foreign investors, while domestic retail investors who had been so active on thinly-traded stocks in the previous weeks also ended their speculative actions, an analyst said.
JSX share prices declined by 0.6 percent, with the composite index closing the week down by 4 points to 618.06.
Total transactions reached 346 million shares worth Rp 1 trillion (US$426 million).
Foreign-buy transactions amounted to Rp 609 billion against total sell transactions of Rp 671 billion.
The most active stocks in terms of value were Telkom (with a total transaction value of Rp 93 billion), Jababeka (Rp 56 billion), Steady Safe (Rp 47 billion), Indocement (Rp 46 billion), Lippo Land (Rp 41 billion), Indosat (Rp 37 billion), BDNI (Rp 33 billion), CMNP (Rp 32 billion), Astra International (Rp 32 billion) and HM Sampoerna (Rp 31 billion).
An electronic equipment distributor, Astra Graphia, advanced 14 percent to close at Rp 3,925 on the news that the company will acquire a subsidiary of Astra International.
The top 10 securities companies in terms of trading value are Makindo, Credit Lyonnais, Lippo Securities, Niaga Securities, Peregrine Sewu, HG Asia, Jardine Fleming, ING Baring Sec., Merrill Lynch and Bhakti Investama. (alo)