Share price on JSX expected to gain ground
Share price on JSX expected to gain ground
JAKARTA (JP): Share prices on the Jakarta Stock Exchange
(JSX) are expected to strengthen this week after losing ground
last week.
Securities analysts said the buying sentiment would likely
improve and that many investors would reenter the market to
benefit the low prices.
They said that unlike last week, when many investors dumped
their shares on fears that the recent devaluation of the
Philippine peso would affect the Indonesian rupiah, prices would
increase this week.
"There was a sign of speculative trading of the rupiah but I
think such a bad situation is over," one analyst said.
The rise in the aid commitment made by the Consultative Group
on Indonesia (CGI), a consortium of donor nations and financial
institutions, in its meeting in Tokyo, indicated the group's
strong confidence in the country's economy.
"The rise in the loan commitment will also improve foreign
investors' trust and they will reenter the market," he said.
The CGI pledged US$5.3 billion in fresh loans for this fiscal
year, up from $5.26 billion last year.
The trading activities were dominated by sellers last week,
pushing down most of the small and medium share prices. The JSX
Composite Index, however, closed almost unchanged at 724 last
week as compared to 723.42 the previous week.
"Many share prices declined as investors feared the CGI would
lower its commitment. If it had happened it would have affected
the development plan," Edwin Syahruzad of Penthasena Arthasentosa
said.
"The increase in CGI aid, nonetheless, sent a very positive
market sentiment," he said.
The analysts said that this improved situation and would
encourage foreign investors to buy after taking profit last week.
Debut
Several companies will make their capital market debut this
week and their floatings are expected to further improve the
trading activities.
Chemical firm Lautan Luas, synthetic yarn producer PT Panasia
Filament Inti, Lippo General Insurance and property firm Lippo
Cikarang, are scheduled list their shares on the Jakarta bourse
on July 21, July 22 and July 24 respectively.
Bank Arya Panduarta of the Ongko Group will float its shares
July 31.
Besides that, some securities dealers expected foreign funds
managers to enter the market in anticipation of better-than-
expected second quarter results.
Asian Development Securities' head of dealers, Vera Marpaung,
said: "We're waiting for good results in the second semester."
The JSX composite index rose 0.58 points higher last week to
close at 724.00 on Friday from the previous week's 723.42 points.
Overall, the performance of share prices were lower last week,
reflected in the declining of volume turnover and transaction
value.
The total average daily turnover declined by 11 percent last
week to reach only 280.1 million shares, down from the previous
week's 312.3 million shares.
The average transaction value also dropped by 19 percent to
achieve Rp 496.08 billion ($206.7 million) last week, from the
previous week's Rp 590.88 billion ($246.2 million).
The average daily turnover and value declined last week
because the market was closed on Thursday in observation of
Prophet Muhammad's birthday.
Last week, blue chips stocks closed mixed.
State-run Telkom rose Rp 100 over the week to close at Rp
4,025, satellite operator Indosat climbed Rp 150 to Rp 7,575,
Gudang Garam climbed Rp 75 to Rp 9,500.
Cigarettemaker HM Sampoerna shed Rp 50 to close at Rp 9,375,
Bank Negara Indonesia lost Rp 50 to Rp 1,475, while Bank
Internasional Indonesia shed Rp 75 to Rp 1,825. The country's
largest automaker Astra International dropped Rp 325 to Rp 8,350.
(aly)