Share prices expected to be slightly firmer

Share prices expected to be slightly firmer

JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
are projected to be slightly firmer this week with the expected
announcement of the International Monetary Fund (IMF) bailout
package for Indonesia.

Securities analysts said the decline of regional markets would
not influence trading activities on the JSX as most investors
were watching closely for the outcome of talks between Indonesia
and the IMF.

"The IMF financial package and its conditions are the key
factors for most investors," Harita Securities' president
Christina Lim said over the weekend.

"While it is difficult for investors to predict the direction
of the market, this week will see a different mode," she said.

The IMF and Indonesian government officials have not yet
hinted the amount or conditions of the financial package but have
said they are optimistic about the outcome.

Securities analysts and brokers in Jakarta speculated that the
package would be announced this week and would in the short term
restore market confidence.

Harita's Christina said the decline of stock prices on the JSX
over the past few weeks was essentially caused by a loss of
confidence in the country's ailing economy.

Indonesia's economy was the hardest hit by the monetary crisis
plaguing the region following the devaluation of the Thai baht in
early July.

Since then, the Indonesian rupiah has lost about 35 percent of
its value against the U.S. dollar, and share prices on the JSX
have dropped almost 30 percent.

Last Friday, the JSX composite index remained below the 500
level at 490.39 points.

Asian Development Securities' director Naotake Ikeda said
details of the IMF package and the conditions attached to it
would not lead investor sentiment in the near future.

"Even if the government announces the result of the talks, it
will not immediately provide a fresh sentiment for the market.
The effects of the package would be felt in the long term," he
said.

"I think most foreign investors will have to closely watch the
conditions of the financial package," he said.

Analysts speculated that the IMF-led financial package would
demand the Indonesian government introduce a complete financial
reform package, which would include the liquidation of several
ailing banks.

Edi Widjoyo of Mashill Jaya Securities said that bank
liquidations would send a positive mood to the stock market.

"Though it is not new news, the liquidation of insolvent banks
could increase market sentiment as it is in line with investors'
expectations," he said.

The JSX composite index fell 5.8 percent, or 30.28 points
down, to close at 490.39 last week.

Average daily turnover rose 3 percent to 353 million shares
changing hands last week compared to 340.9 million shares the
previous week.

Total daily value fell to Rp 338.98 billion (US$96.85 million)
last week compared to Rp 416.51 billion the previous week.

Most big capitalized stocks fell last week on the back of
lackluster trading due to the impact of the decline in the
regional markets, brokers said.

State telecommunications firm PT Telkom slid Rp 250 to close
at Rp 3,375; satellite operator Indosat fell Rp 275 to Rp 8,700;
cigarette maker Gudang Garam Rp 375 to Rp 8,725 while its
competitor Sampoerna slipped Rp 200 to Rp 5,800.

Bank Internasional Indonesia fell Rp 50 to Rp 750, Bank Negara
Indonesia was unchanged at Rp 775 and Bank Dagang Nasional
Indonesia shed Rp 25 to Rp 525. (aly)