Share trading subdued, but rupiah to strengthen
Share trading subdued, but rupiah to strengthen
JAKARTA (JP): Trading on the Jakarta Stock Exchange (JSX) is expected to remain subdued this week as the profit-taking which began late last week is expected to continue amid a holiday mood.
Analysts predicted trading would be flat to lower, with investors on the sidelines for the year-end holidays.
Dodi Prawira of PT Bapindo Bumi Sekuritas said trading for the coming week would be subdued due to a lack of players as the end of the year approached.
"Trading volume next week will be down to half of what it was last week as investors leave for their holidays," Dodi said during the weekend.
However, there will still be some profit-taking by those investors who took positions early last week, especially those holding telecommunication shares, he said.
Last week's market was buttressed by telecommunications shares, which soared on reports that fund manager George Soros and other groups, including American International Group and Newbridge Capital, were keen to enter the local stock market.
According to reports, these groups were particularly eying shares of state owned telecommunications companies PT Telkom and PT Indosat.
But the positive sentiment died down toward the end of last week when the eagerly awaited confirmation that these foreign funds were going to enter the market failed to materialize, Dodi said.
Dodi said the Composite Index would face little pressure in the coming week as trading would not be intense.
"To a limited extent, profit-taking will continue this week. The index might lose about 1 percent as a result," Dodi said.
Currency dealers expect the rupiah to continue to strengthen in the early part of this week, adding to gains made last week on strong sentiment on the currency.
Foreign fund managers were seen selling their U.S. dollar holdings last week, while local market participants were seeing buying the greenback.
"Foreign players are anticipating a capital inflow of U.S. dollars into Indonesia by early next year," a dealer with a joint venture bank said.
He said sentiment on the rupiah strengthened noticeably beginning in the middle of last week on news that foreign fund managers were going to buy a significant amount of local shares.
Other issues such as the pull out of Standard Chartered Bank from a deal to buy a stake in Bank Bali did not significantly affect positive sentiment toward the local currency, he said.
The British bank announced last week its withdrawal from the Bank Bali deal, but said it was still interested in buying a stake after Bank Bali's rights issue slated for the end of this month.
The JSX Composite Index increased by less than 1 percent to 638.82 points last week, from 633.83 the previous week.
The average daily turnover last week increased to 670.6 million shares, compared to 542.2 million the previous week.
But the average daily transaction value decreased to Rp 660.8 billion last week from Rp 807.3 billion the week before.
Last week's top gainers were PT Asuransi Harta Aman, rising 175.86 percent, PT Unggul Indah Corp. (52.17 percent) and PT Pool Asuransi Indonesia (50 percent).
The week's big losers were PT Bank Bali, down 54.55 percent, PT Prima Alloy Steel and PT Zebra Nusantara (both down by 25 percent).
Meanwhile, PT Tirta Mahakam Plywood Industry was added to the JSX last week.
The top brokerage firms by transaction value were PT Jardine Fleming Nusantara with Rp 279 billion, PT Danareksa Sekuritas (Rp 265.1 billion) and PT ABN Amro Asia Securities (Rp 264.8 billion).
The rupiah increased 2.5 percent to close the week at 7,045 against the U.S. dollar, compared to its 7,225 close the previous week. (udi)