Share trading at JSX remains bearish
Share trading at JSX remains bearish
By Wachyudi Soeriaatmadja
JAKARTA (JP): Foreign investor pullout from the Jakarta Stock
Exchange (JSX) is expected to continue this week as they size up
their holdings in technology stocks in other exchanges in the
region, equity analysts have said.
Bhakti Investama's Budi Ruseno said over the weekend,
"Portfolio rebalancing by foreign investors from Indonesia to
more attractive markets in the region will continue next week."
Budi said the decrease in Indonesia's weighting in the Morgan
Stanley Composite Index (MSCI) was a negative factor last week
and would be so again next week.
Indonesia's MSCI weighting was reduced recently from 2.5
percent to 1.7 percent, causing many foreign investors here to
migrate to neighboring Malaysia, Hong Kong and Thailand.
International investors use the index to determine the
relative portion of investment portfolio allocation among
countries in which they invest.
However, discounting the MSCI effects, an analyst from a
foreign securities house said there was a deliberate move by
major foreign fund managers to depress the share prices for their
own future purpose.
"These big foreign funds are interested in buying state assets
which will put on sale by the Indonesian government through the
JSX," he said.
They sold their blue chip shares to make a selling pressure to
other stocks, he said, especially those of state-owned companies
which have been put on the government's privatization list.
"This strategy will enable them to buy government stocks at
state companies at cheap prices," he said.
The government has plans to further divest its shares in
publicly listed companies, including PT Astra International
automotive company, PT Semen Gresik cement producer, PT Aneka
Tambang general mining company, PT Telkomsel and PT Indosat.
Budi said the Composite Index would range between 503 points
and 560 points this week, but that early during the week it would
move in a narrower range of between 528 points and 550 points due
to a technical rebound.
"In general, the market will be mixed next week," he said over
the weekend.
Budi said that a rally in select blue chips late last week was
likely to continue early this week as a technical rebound was a
normal thing after more than two weeks of the index continually
losing ground.
"An unsustainable technical rebound early next week is most
likely," he said over the weekend.
Big shares which had lost a lot of their value for the past
weeks would be the target of investors' hunt early this week, he
added.
The rupiah, according to currency dealers, would have to
continue to bear the burden from the weak sentiment on the JSX.
A dealer said over the weekend, "The rupiah will be pressured
by some dollar buying next week as offshore funds are being
shifted out of the country."
The rupiah ended weaker last week against the U.S. dollar at
7,448, compared to 7,408 the previous week.
The JSX Composite Index dropped 3.5 percent last week to close
at 548.55 points, down from 568.55 the previous week. The daily
average transaction value during the four-day week increased to
Rp 703.11 billion last week, compared to Rp 622.57 billion the
previous week.
Meanwhile, treasury bonds traded on the Surabaya Stock
Exchange (SSX) recorded no transactions for the past two weeks.
It booked transactions worth Rp 6 billion in the three-year
floating rate bonds, priced at 96 percent of the bond face value
three weeks ago.
According to SSX Fixed Income Trading Manager Erna Dewayani,
the transaction was not made last week as the best bid price fell
short of the asking price put out by the bond issuer.
"The best bid last week was only at 95.5 percent of the face
value against the best asking price of 97 percent," Erna said.
The SSX traded Rp 2.16 trillion of the total Rp 255 trillion
treasury bonds issued by the government last year to finance
recapitalization costs of the country's ailing banks.