Stock prices likely to remain volatile
Stock prices likely to remain volatile
JAKARTA (JP): Stock prices on the Jakarta Stock Exchange (JSX)
are likely to remain volatile this week due to persistent anxiety
over a weakening rupiah against the U.S. dollar, securities
analysts and brokers said.
The securities analysts said the persistent decline of the
rupiah against the American dollar would continue to affect
stocks trading on the JSX despite a rise in the last two days of
last week.
The rupiah breached the psychological level of 4,000 Friday
touching a new historic low of 4,020 against the U.S. dollar in
afternoon trading before closing at 3,970/90.
Securities analysts said that they remained concerned over the
rupiah's persistent decline, fueled by a continued demand for
dollars by local companies to cover foreign debts which would
mature by the end of the year.
"I think people still will closely watch the direction of the
rupiah this week," Mohammad Sjahrial, the research head of
Pentasena Securities said last week.
Harry Danardojo, sales director of Lippo Securities, said that
stock brokers would focus their attention on the rupiah.
"The sooner the rupiah reaches its new equilibrium -- without
government intervention -- the quicker the stock market will
recover," he said.
Most securities analysts said last week that the announcement
by Minister/State Secretary Moerdiono about President Soeharto's
health would create negative sentiment in the stock market.
Moerdiono said that the President would take a ten-day rest.
"I would like to announce that the presidential medical expert
team has advised the President to take a rest," Moerdiono
said.
"When President Soeharto went to Germany for a medical checkup
last year, the main price index on the JSX fell," one analyst
said.
In July 1996, President Soeharto went to Germany for a medical
examination at a cardiac hospital resulting in a clean bill of
health.
However, some other stock analysts expressed optimism over
news that Minister of Finance and Indonesian businessmen would
join forces to regain foreign investor confidence in the
country's economy.
A stock broker with a joint venture securities firm said that
the market could get a boost from the news that a group of
prominent businessmen and personnel from the Ministry of Finance
would go to Washington and New York to persuade creditors to roll
over their debt.
"I think news about the business visit of the Minister of
Finance and other businessmen is good. They'll be able to
persuade the creditors about the Indonesian companies' foreign
debts," he said.
The JSX composite index closed 13.07 points higher last week
to 414.778.
The average daily turnover was 547.40 million shares changing
hands compared to 326 million in the previous week.
The average daily transaction value was Rp 265.94 billion
(US$101.06 million) last week in comparison to Rp 291.57 billion
in the previous week.
Most state big capitalized stocks gained ground last week with
state-owned telecommunications firm PT Telkom rising Rp 225 to Rp
2,900 and satellite operator Indosat by Rp 300 to Rp 8,575.
Cigarette maker Sampoerna rose Rp 125 to Rp 4,975, while
competitor Gudang Garam was up Rp 1,250 to Rp 9,000 and Bank
Negara Indonesia gained Rp 25 to Rp 600.
Bank Internasional Indonesia and Bank Dagang Nasional
Indonesia (BDNI), however, closed unchanged at Rp 475 and Rp 400
respectively last week. (aly)