Share prices on JSX expected to remain low
Share prices on JSX expected to remain low
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
will continue to remain sluggish this week as concerns about a
possible tension in the country's political system ahead of the
general election next month is growing.
Securities dealers and analysts said the tense atmosphere
before the election could spark riots in the country's major
cities.
"If it happens, it will mean a hard blow to the stock market,"
one analyst said. "In such a condition, no one will stay in the
market."
In addition to political woes, investors also remained concern
about another increase in the interest rates in the United
States.
Chandra, of Amsteel Securities Indonesia, said that fears over
the possible increase in the interest rate would remain a major
concern in the trading activities.
"It seems that, like other regional markets, the Indonesian
stocks will also be under pressure from fears of another interest
rate increase," he said.
The next Federal Open Market Committee meeting is scheduled
for May 20. American economists predicted that the Fed would
increase the interest rate at least by 25 basis points.
In March, the Fed raised the rate by 25 basis points.
Chandra said trading on the local exchange would remain
dormant and lack direction because of the impact of fears over
the possible growing tension in the political system and over the
rise in interest.
This condition would further push down the JSX composite
index, which reached its three-month low early last week.
"I think the JSX index can go down to the 600 level," he told
The Jakarta Post over the weekend, adding that the normal level
of the local JSX composite was between 600 and 640.
The JSX composite index fell 0.28 points to 637.15, its lowest
level in the last three months.
Total daily trading volume last week averaged about 172.78
million shares worth US$148.68 million against the previous
week's average turnover of 161.76 million shares worth $153.98
million (Rp 366.47 billion).
Chandra said the total volume of shares changing hands will
continue to decline in the coming weeks.
"The trading volume will continue to decline," he said.
Blue chip stocks closed mixed last week.
HM Sampoerna shares shed sharply though the firm did not make
any market action.
But market speculation said that HM Sampoerna had failed to
compete with the other cigarette maker Djarum in controlling the
domestic market share.
Sampoerna's shares fell by Rp 750 to Rp 9,625 and its
competitor Gudang Garam by Rp 50 to Rp 10,075.
The telecommunications company Telkom's shares rose by Rp 75
to Rp 3,600 and Indosat by Rp 300 to Rp 6,625.
Banking stocks rose last week. BNI rose by Rp 75 to Rp 1,375,
BII by Rp 25 to Rp 1,750, Lippo bank by Rp 50 to Rp 2,350
Last week's trading on the JSX was marred by the trading
suspension of Bank Pikko and Multibreeder Adirama Indonesia.
On Tuesday, the exchange suspended Bank Pikko's shares at
14.23 after its shares surged unrealistically by over 200 percent
from an opening of Rp 1,300 to Rp 4,000.
The capital market supervisory agency (Bapepam) blamed the JSX
for being too late to suspend Bank Pikko's shares.
The exchange is investigating the firms which manipulated the
market.
On earlier trade on Friday, the exchange suspended the trading
of Multibreeder Adirama shares after its share price surged 30
percent within three hours of trading opening.
The trading of the company's shares was resumed two hours
later after the exchange's official found nothing strange in the
share transaction. (09)