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)