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)