Share prices on JSX expected to stabilize
Share prices on JSX expected to stabilize
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
are expected to be more stable this week but trading activities
will still be driven by short-term oriented investors, securities
analysts say.
The analysts said that investors will remain cautious over the
political impact of the last weekend riots.
A number of big shares, which booked technical rebounds before
the closing of the week, will have small chance to enjoy another
gain.
Such big caps, they said, may even suffer losses on a profit
taking as investors are likely to switch their bids to second
liners.
"I would say that the market will be flat next week on an
estimated consolidation mood," a dealer with a London-based
brokerage told The Jakarta Post over the weekend.
"There might not be a high volatility, gainers would be
balanced by losses," the dealer added.
"In line with a more stable political situation, both foreign
and local investors have come back to the market. But unlike what
was happening late this week, they will hunt second liners and
third liners as the opportunity to book gains is much bigger on
those stocks," Sumirat from PT Pentasena Arthasentosa told the
Post.
"What was happening this week is better than expected. We saw
a big drop on Monday and Tuesday but strong rallies midweek
pushed stock prices up. It just happened quickly," Lippo
Securities managing director Kelvin Lee said.
"It seems to me that short-term oriented investors will still
dominate the trading as they are still cautious about the
political impact of last weekend's riots," another analyst said.
Those analysts shared an assumption that last weekend's
rebound was also attributable to a court hearing delay, meaning
that investors may also keep in mind that anything could still
happen when the delayed hearing takes place on Aug. 22.
A court hearing to try a lawsuit filed by the ousted chief of
the Indonesian Democratic Party (PDI), Megawati Soekarnoputri,
was scheduled for last Thursday but it was delayed until August
22, because the judge had a toothache.
The dealers and analysts said Megawati's court hearing remains
the most important event to be watched. So, investors will not
risk their investment by making any big deals here for long term
strategy.
"It's great that there were no fresh riots following the delay
of the hearing. But it made people nervous to see many soldiers
in the street just to secure the hearing," one of the dealer
said.
"The situation may be stable next week but it's too hasty to
expect that such a `controllable' situation will continue for a
longer term," the dealer added.
On a technical viewpoint, Sumirat said that some of the second
liners and third liners from each sector on the JSX are currently
undervalued.
He declined to name the most wanted stocks but he said some of
them failed to rebound last week.
"I would say that the 'bargain hunting' made by local
investors on the second liners will continue and their move will
also attract foreign investors to follow suit," he added.
Lee foresaw that short-term oriented investors will quickly
take positions this week, not to miss any buying opportunity.
Another dealer, however, viewed that although prices will
fluctuate in a very narrow range, several blue chips will manage
to go up because some investors might have been late to regain
their position last week.
On the general market sentiment, those analysts shared a
positive sentiment as global equity market had recovered last
week following a rally on Wall Street, coupled with a more
controllable political situation in the country.
Net seller
The JSX recorded total transactions of 651 million shares
valued at Rp 1.5 million (US$639 million) last week.
Foreign investors became net sellers with total sell
transactions of 365.9 million shares worth Rp 1.03 trillion
against buy transactions of 322 million shares worth Rp 903
billion.
Stock prices closed the week down 0.6 percent, with its
composite index decreased 0.34 point at 560.92 points after
hitting a low of 533.48 on Tuesday due to panic selling following
mass riots in the city.
Telkom and Bimantara topped the list of most active stocks
both in volume and value, with total transactions of 66 million
shares worth Rp 212 billion and 42.5 million shares worth Rp 92
billion respectively.
State-owned securities company PT Danareksa ranked third-most-
active broker with a trading value of Rp 139.98 billion, while
another local broker PT Makindo was recorded as the most active
with a trading value of Rp 275 billion.
Dealers speculated that Danareksa and Makindo, together with
another state-owned securities company PT Bahana Securities,
intervened in the market Monday to ease selling pressures.
Danareksa's president, Agus Projo, however, rejected the
intervention charge, saying "We have seen an opportunity to buy,
so why shouldn't we take the opportunity."
The other top 10 stocks for value were Gudang Garam (with a
trading value of Rp 86 billion), HM Sampoerna (Rp 85.5 billion),
Duta Anggada (Rp 65 billion), Semen Gresik (Rp 53 billion),
Indofood (Rp 53 billion), BDNI (Rp 49 billion), Indosat (Rp 45
billion) and Dharmala Intiland (Rp 40 billion). (alo)