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.