Stock mart consolidates as holidays approach

Stock mart consolidates as holidays approach

JAKARTA (JP): Share prices on the Jakarta Stock Exchange are
likely to consolidate as the Chinese New Year and the Moslem Idul
Fitri holidays approach.

Securities analysts said holiday fever and the slim
probability of the U.S. Federal Reserve raising the interest rate
in Tuesday's meeting would be the main reasons for the expected
decline in buying sentiment this week.

Most security analysts told The Jakarta Post the market was
hit by selling pressure earlier last week but it showed signs of
strength before closing the week.

A. Soerya of HG Asia brokerage firm said the improving
sentiment at the end of the week had not been anticipated as most
investors had estimated the market would continue its downward
turn.

"We expected the market would be slowing down but we were
wrong," he said.

The JSX index rose 1.8 percent or 12.12 points to close at
691.12 against last week's 678.91. The index rose steadily from
early last week to reach 691.33 Wednesday on the back of the
improvement in investor confidence in the local market.

The index weakened Thursday with the news that angered mobs in
Karawang, West Java had damaged churches, homes and businesses of
ethnic Chinese. The share prices, however, gained ground before
closing the week, with the index reaching a new record high of
691.12 Friday.

Daily turnover averaged 272.6 million shares worth US$238.1
million in comparison to the previous week's 337.8 million
shares worth $270.9 million.

The trading volume reached 263,8 million shares in against
last week's 301 million.

Transaction values totaled Rp 550 billion compared to last
week's Rp 632 billion.

Edwin Syhruzad of Amsteel Securities said there was still room
for the JSX index to further increase in the coming weeks, given
the average price earning (PE) ratio was still lower than those
in other markets in the region.

"The price earning here is among the third lowest in the
region," he said, adding this would provide more opportunity for
share prices to further increase.

Reports that foreign investment funds were raising their
investment portfolios in Indonesia would also become an important
incentive in trading activities in the coming weeks.

Jasmine Tedja of HSBC said foreign fund managers were more
confident about the Indonesian market even though there were some
fears the country's political climate would hot up before the May
general election.

"The fund managers had anticipated that earlier this year,"
she said, adding that the rising JSX index would further attract
foreign fund managers.

Most analysts and dealers attributed increased trading
activities to reports about the listed companies' expansion
programs.

PT Tambang Timah gained by Rp 950 to close at Rp 5,050, Bunas
Finance Indonesia gained by Rp 350 to close at Rp 2,200, Branta
Mulia gained Rp 500 to close at Rp 2,700.

Edwin of Amsteel Securities said Tambang Timah was a favorite
due to reports the tin mining company would join with the
country's timber tycoon Mohamad 'Bob' Hasan to enter the disputed
Busang gold mine, in East Kalimantan.

While Lippo group stocks such Multipolar gained Rp 75 after
the shareholders rubber stamped its plan to acquire a majority
stake in the publicly listed department store chain Matahari.

The same held true for Bakrie & Brothers' shares following the
announcement its management had received an offer from the
politically-well connected Nusamba business group to buy its
shares in Indocopper, which owns 9.36 percent of Freeport
Indonesia.

Bakrie & Brothers gained Rp 150 to close at Rp 1,175 from the
previous week's Rp 1,025.

The investors had high confidence in Bakrie's shares because
they believed the divestment of Indocopper meant Bakrie &
Brothers would be more serious about developing its core
businesses such as telecommunications, infrastructure and
plantations, said Jasmine of HSBC.

HM Sampoerna gained Rp 500, while its competitor Gudang Garam
dropped by Rp 150 and the country's largest automaker Astra
International dropped by Rp 75 to close at Rp 6,250.

This week, with the Chinese New Year and Idul Fitri holidays
approaching, the market is expected to slow down or if not it
will be stagnant.

An analyst said the banking stock would remain the favorite
stock to pick this week due to a better projected performance of
the country's banking industry.

Also worth noticing is consumer products stock which is
predicted to perform well due to increasing consumption during
the holidays.

But on overall market performance, analysts said that most
foreign fund managers have turned their eyes in the direction of
Indonesia. With that, the JSX would gain ground this week.

An analyst from a joint venture security firm said high
contribution from local investors would also boost the market.

"Local investor participation shows they are expecting to see
the index record 700 this year," he said. (09)