Share prices on JSX likely to lose ground
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) are likely to lose ground this week after showing a good performance in the last two weeks.
The hint by the U.S. Federal Reserve's chairman Alan Greenspan to raise the interest rate will put investors further on the sideline.
"Like those in other regional markets, Indonesian investors are likely to remain in the wait and see stance," said a securities analyst.
Analysts said in the next few weeks, the buying appetite would be weaker as there are no "fresh incentives" such as a new government policy or the issuance of economic indicators which could prop up the buying sentiment.
Greenspan's comments on the possible increase in the U.S. interest rate would further undermine trading activities, they said.
In addition to such an unfavorable condition, the launching of several initial public offerings (IPO) would also affect trading activities in the secondary market.
The JSX composite index ended 8.88 points higher to close at 705.37 last Friday against 694.49 the previous week. The JSX composite index, the local benchmark index, fluctuated last week reaching its new high of 712.66 Wednesday Feb. 16 though it fell to 709.92 Thursday before closing at 705.37 Friday.
The average daily trading volume increased last week to 248.6 million shares compared to 183.8 million shares the previous week.
The average daily trading value also rose to Rp 631.4 billion (US$265.3 million) last week against the previous week's Rp 411.4 billion ($173.6 million).
A dealer with HG Asia brokerage firm said the market was generally slow earlier in the week but a rise in prices of several shares managed to push up the weekly price index.
Blue chips such as cigarette maker HM Sampoerna and Bank BNI were among last week's losers. Sampoerna's prices dropped by Rp 2,250 to Rp 11,900 while BNI lost Rp 25 to close at Rp 1,700.
Laksono Widodo, an analyst from ING Barings Securities said the drop in Sampoerna's share prices was due to its less-than- expected net profits. The company was projected to earn Rp 420 billion in net profits in 1996 but it reached only Rp 394 billion.
"Investors were disappointed with its results," he said.
But other blue chips including PT Telkom, Indosat, BNI and Gudang Garam booked gains last week.
PT Telkom's share rose by Rp 75 to Rp 4,175, Indosat by Rp 275 to Rp 7,050 and Gudang Garam by Rp 875 to Rp 11,675 and state owned bank BNI.
Other companies to gain included Jaya Pari Steel which rose by 93.10 percent to Rp 2,800, Panca Wirama Sakti by 43.18 percent to Rp 1,575 and Lippo Pacific Finance by 34.38 percent to Rp 2,150.
PT Elang Realty's shares were among the most popular stocks last week. The share price booked a significant gain following news reports that Johannes Kotjo, known as a "takeover expert", would acquire the bank.
The company's shares rose by Rp 150 to close at Rp 975 last week against Rp 850 the previous week.
However, the latest report said that an affiliate of the Bakrie Group had signed an agreement to acquire the bank.
Barito Pacific share price booked a gain of Rp 225 to close at Rp 2,175. The price rise was mainly due to market speculation of the firm's plan to raise a syndicated loan later this month, an analyst said. (09)