Shares weaken on Jakarta exchange

Shares weaken on Jakarta exchange

JAKARTA (JP): Lack of fresh factors, shorter trading week and rising pressure for domestic banks to increase interest rates weighted down the already weak market sentiment on the Jakarta Stock Exchange (JSX) last week.

The JSX Composite Index mirrored last week's activity, drifting to 509.84, down 3.54 points from last Monday's opening of 513.38.

Further down-side is limited and the index is likely to continue its course sideways. We feel the average three-month deposit rate is likely to increase by, at least, 100-150 basis points over the next twelve months to maintain an attractive spread between the rupiah deposit rates and the recently increased U.S. dollar short term rate to 5.5 percent.

The need to increase the rupiah deposit rates is essential to maintain a steady flow of foreign capital. Further inflation is likely to hit the 10 percent level. Other factors which will constraint the increase of the index are the up-coming new issues which have absorbed funds from the secondary market.

The weak market sentiment also dragged down the debut of new- comer Suparma, a paper mill, with its share price falling to Rp 2,675 (US$1.22) from its offer price of Rp 3,500.

The average daily turnover on the regular board increased to 12.14 million shares worth Rp 54.36 billion (US$24.82 million) from 8.63 million shares worth Rp 38.75 billion in the previous week. Last week's total turnover decreased to 75.46 million shares valued at Rp 313.72 billion from 88.90 million shares valued at Rp 397.71 billion in the previous week.

Foreign investors largely remained sidelined during the week. However, counters which were actively traded included Astra Int'l, Semen Gresik, Indah Kiat, BII, Sampoerna, BDNI and Indosat, which remained the most actively traded counter.

Local players mainly took profit. Those who traded were seen active on Astra Int'l, Bank Danamon, Barito Pacific Timber, Andayani Megah, JIHD, Indosat, Darya Varia and the new comer Suparma.

Pudjiadi Prestige, a property company, made its debut on the JSX last week and offered 26 million shares at Rp 2,500 per share.

Some of last week's best performers were Summarecon (up Rp 1,500), Ometraco Finance (up Rp 500), CP Indonesia and Indosepamas (up Rp 400 each) and Indofood SM (up Rp 325).

The biggest losers were Andayani Megah (down Rp 650), Suparma and Indocement (down Rp 400 each), Medco Energi (down Rp 375) and Sumalindo Lestari (down Rp 225). Losers outnumbered gainers by 47 to 41, while 72 remained unchanged.

-- Sigma Batara