Share prices may remain under pressure this week

Share prices may remain under pressure this week

JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
are likely to remain under pressure this week as most investors
remain cautious about the volatile rupiah, securities analysts
say.

Mohammad Syahrial, head of research of Penthasena Arthasentosa
Securities said the volatility of the region's currencies would
still affect the Indonesian rupiah and subsequently the local
stock exchange.

"The Indonesian currency is still volatile and most investors
are still cautious," he said.

"I think some investors will take a wait-and-see attitude to
watch the direction of the rupiah," he said.

Harita Securities president Christina Lim agreed with
Syahrial, saying investors would remain in a difficult situation
with the current financial market being jittery.

"With the uncertainty in the financial market, investors find
it difficult deciding what to do," she said.

A senior dealer of Asian Development Securities, Vera
Marpaung, said the region's financial markets were still
unpredictable and that fluctuation in the Thai baht or the
Philippine peso would still affect the rupiah or the Malaysian
ringgit.

While the money market was still uncertain, stock buyers
prefer to stay on the sidelines and take a break.

Rupiah was under attack early this week.

The currency slipped to a historic low of 2,650/55 against the
U.S. dollar Monday.

The decline in the rupiah also affected share prices on the
JSX, which on the same day lost 11.59 points to close at 712.40.

The rupiah continued to fluctuate against the U.S. dollar the
whole week with the spot rupiah closing at 2,610 on Friday last
week.

Syahrial estimated that the volatile regional currencies,
including the rupiah, would remain unsteady for the next three
months.

"You cannot expect the currency turmoil to recover within a
short period of time," he said.

Last week trading on the JSX was marred by the suspension of
PT Bank Papan Sejahtera and PT Langgeng Makmur Plastic because
the prices of the two companies' shares fluctuated over 20
percent within one single trading day.

Bank Papan's share price rose 23.08 percent on Friday to Rp
2,000 from Rp 1,625 while Langgeng Makmur's share declined 22
percent to Rp 975 from Rp 1,200.

The management of JSX suspended temporarily the trading of the
companies' shares on the exchange and resumed trading before
closing time.

The JSX composite index closed 13.942 points lower to 710.058
last week, an effect of attacks by foreign speculators on the
rupiah.

The average daily turnover rose around 4 percent last week to
293 million shares from 280.1 million shares changing hands in
the previous week.

The average daily transaction value also increased 23 percent
to Rp 611.26 billion (US$235.1 million) from Rp 496.08 billion in
the previous week.

Christina Lim said, despite pressures on share prices, the
country's main price index would not exceed the psychological
level of 700.

Several big cap stocks closed mixed last week with state-run
Telkom dropping Rp 100 to Rp 3,925, while satellite operator
Indosat rose Rp 75 to Rp 7,650.

Cigarette-maker HM Sampoerna rose Rp 150 to close at Rp 9,225,
Gudang Garam slipped Rp 50 to close at Rp 9,375, Bank Negara
Indonesia was unchanged at Rp 1,475 while Bank Internasional
Indonesia lost Rp 25 to close at Rp 1,800. (aly)