Speculative JSX buying expected to continue
JAKARTA (JP): Analysts are forecasting that domestic investors will continue their speculative buying on the second-liner and third-liner shares listed on the Jakarta Stock Exchange (JSX) this week.
"Domestic investors' activities are likely to coincide with the expected return of foreign fund managers on big-cap stocks because prices of those stocks have been stagnant during the last few weeks," Dandossi Matram from the Jakarta Brokers Club told The Jakarta Post over the weekend.
A senior floor trader with a foreign brokerage, Nadjib Usman believes the market will be marked by speculation this week.
According to Nadjib, speculation, which is typical for short- term investment strategy, is usually boosted by rumors of takeovers or bonus share issues.
"Some speculators may even try to gain profits on certain stocks for dividends only," Nadjib told the Post.
He said that the plans of many companies to hold annual shareholder meetings soon is another reason for local investors' active participation because they are also looking for positive dividend policies.
"I think investors want to take every chance to gain profits," Nadjib said.
Dandossi noted that local investors have become more responsive to stock price movements since the automation of the JSX's trading system.
"The system allows them to carefully follow individual stocks. They sometimes decide to buy or sell immediately following any rumors on those individual stocks," Dandossi said.
The two analysts said that last week's 2.8 percent increase in JSX share prices was mainly supported by local speculative buying although the return of foreign funds on Gudang Garam was also influential.
Gudang Garam's share price rose by nearly Rp 4,000 (US$1,7) to close last week at Rp 34,300 on the company's plan to split its stocks this week.
The JSX composite index closed the week 17 points higher at 624.53, as compared to an increase of only one point two weeks ago.
Transactions
The JSX booked transactions of Rp 1.7 trillion last week, with 563 million shares changing hands.
Foreign buy transactions were Rp 1.16 trillion, while the sell transactions were Rp 1.17 trillion.
The prices of 104 stocks advanced and 64 declined, while the other 68 were unchanged.
Dandossi said that pulp and paper stocks were given upward momentum by an upward trend of pulp and paper prices.
Data from the JSX showed that the price of Inti Indorayon shares was up 18 percent to close at Rp 2,850 last week, with 20.1 million shares changing hands at a total value of Rp 51.1 billion.
Indah Kiat was second in the top ten stocks in terms of volume with 24.5 million shares traded at Rp 59.3 billion.
Another paper producer, Suparma, was also among the top ten stocks in terms of value with 16 million shares traded.
Japfa (Java Pelletizing Factory Ltd.) Comfeed Indonesia, a producer of copra oil cake pellets and coconut oil, led the top ten stocks in terms of volume with 48 million shares traded. Its share price rose 12 percent to close at Rp 1,875.
Dandossi said that Japfa has been actively traded in the last two weeks, following the announcement that the company has signed an agreement to supply its products to McDonalds.
The inactive pure tobacco cigarette maker, BAT Indonesia, was up 15 percent to Rp 11,500 at the week close, boosted by the management's decision to distribute dividends of Rp 1,520 per share.
Dandossi, however, foresaw that the JSX will not see significant participation from foreign investors because the U.S. Federal Reserve may increase its interests rates.
"A survey on Wall Street says that the first quarter of this year saw a significant decline in the funds allocated to equity markets," he said.
"Therefore, I am still doubtful of new inflows of foreign funds," he added.
The top ten stocks in terms of transaction value last week were Lippo Bank (Rp 104 billion), HM Sampoerna (Rp 102 billion), Japfa (Rp 96 billion), Bank Internasional Indonesia (Rp 79 billion), Gudang Garam (Rp 61 billion), Telkom (Rp 60 billion), Indah Kiat (Rp 59 billion), Inti Indorayon (Rp 54 billion), Duta Pertiwi (Rp 51 billion) and Anwar Sierad (Rp 50 billion). (08)