Shares likely to gain ground on consolidation
JAKARTA (JP): Analysts are predicting that share prices on the Jakarta Stock Exchange (JSX) will rise slightly this week on profit taking and consolidation.
"Share prices have gone up too much without stopping this year, so I think investors need time for consolidation because the prices are no longer cheap," Rolan Has from Lippo Investment told The Jakarta Post.
He said that what is going to happen is "rotation buying" which is typical for a consolidation process.
Has said foreign investors would prefer to buy property shares now by liquidating their portfolio in other sectors because property companies are expected to gain higher profits due to the recent reduction of income tax rates on house sales.
"It would be better for the investors to take a breather now while waiting for the announcement of the first quarter results of companies," he added.
Taufik, a dealer from PT Pentasena, believes that the JSX may see profit-taking actions from local investors who have been very active on second-liner and third-liner stocks over the past few weeks.
"I would say that they will immediately sell their shares when prices go up by only two or three points," Taufik told the Post.
"In this kind of mood, I believe that the market will be easily corrected but a strong sentiment for property stocks may help lift the index by a few points at the week close," he added.
Taufik said that the signal for profit taking emerged last Thursday, when the JSX composite index dropped five points from its high of 630 to 625, which was also the lowest level during the week.
"But a technical rebound on Friday pushed up the composite index to close the week at 628.24, 3.7 points higher than the previous week's level," Taufik said.
Transaction
Last week's total transactions on the JSX reached Rp 2.03 trillion with 718 million shares changing hands.
Buy transactions by foreigners, according to data from the JSX, were Rp 1.37 trillion, as compared to the sell transactions of Rp 1.30 trillion.
A textile company, PT Apac Centertex Corporation which is now controlled by President Soeharto's son Bambang Trihatmodjo and businessman Johaness Kotjo, was recorded as the most active stock both in volume and value on the news that the company will take over another textile firm.
Apac, formerly named PT Mayatexdian, booked total transactions of Rp 206 billion with 97 million shares traded.
Apac's share prices advanced 37 percent to close the week at Rp 2,650, making the company the top gainer of the week.
Two listed companies which have proposed to take advantage of the government's new national car policy -- Astra International and Bimantara Citra -- were also actively traded last week, boosted by continuing debates on the new automotive policy.
The JSX also saw active property stock transactions as the government introduced new tax rates which are considered beneficial for real estate developers.
Three property companies were among the most active stocks, including Duta Pertiwi (with 41 million shares traded), Duta Anggada Realty (28 million shares) and Lippo Land Development (11 million shares).
The stocks of three affiliates of Ometraco Corporation, including JAPFA, Multibreeder and Ometraco Realty, were among the top ten losers.
JAPFA's share price declined 13 percent due to its flat earnings report. The company booked Rp 32.3 billion in net profits last year, as compared to Rp 31.5 billion in 1994.
Multibreeder's share price dropped 18 percent on the news that its 1995 net earnings decreased by 40 percent to Rp 9.1 billion.
Ometraco Realty's share prices closed the week 14 percent lower at Rp 1,200.
One of last week's other biggest losers was Lippo Life Insurance, which closed the week Rp 5,450 (48 percent) lower at Rp 6,150 on profit taking. (08)