'Stock market will remain under pressure due to Iraq'

'Stock market will remain under pressure due to Iraq'

The Jakarta Post, Jakarta

Despite a slight rise last week, the Jakarta Composite Index will
remain under pressure this week on continued concerns about the
prospect of a war in Iraq, stock analysts said.

Last week's trading saw the stock index climb by around 0.8
percent to close at 402.24 points, up 2.728 as compared to the
week before. But, a stock analyst at a European bank said that
the rise would be short-lived as fears of war have yet to
subside.

"As long as concerns about war remain, I think the (Jakarta)
market will remain under pressure. The index will likely go below
the level of 400 points again this week because of this
sentiment," an analyst, who asked to remain anonymous, told The
Jakarta Post on Sunday.

The absence of positive domestic sentiment would also add to
investors' lack of appetite to take "the buy-position stance" ,
which would otherwise trigger significant major buying, in turn
boosting the index, he added.

"So, in the meantime, investors would wait on the sidelines
waiting for fresh leads, most notably the latest progress from
Iraq."

The Iraq crisis has been the major issue for the last several
weeks, sparking market jitters all over the world including
Indonesia because if the war materializes, the world's already
fragile economy would be hard hit.

The negative sentiment arising from the Iraq crisis has put a
solid lid on the movement of the index in the Jakarta stock
market, which was previously on an upward trend.

Last week, the daily volume averaged 202.68 million shares
worth Rp 201.5 billion (US$22.6 million), compared with 174.5
million shares valued at Rp 205.8 billion the previous week.

Despite the gloomy outlook, however, selected shares from the
blue chip companies would still draw attention from investors due
to their relatively low prices and keep the index downward trend
in check.

"This would help prevent the index from dropping too
drastically," he added.

Meanwhile on the currency market, Dow Jones quoted local
traders as saying that the U.S. dollar is unlikely to climb much
higher this week, as the central bank stands poised to sell
dollars to protect the rupiah at the Rp 9,000 per dollar level.

The rupiah closed last week at 8,910, up slightly from the
previous week's closing of 8,930.