Stock trading activities expected steady this week

JAKARTA (JP): The Jakarta stock market is expected to remain strong this week on strong economic fundamentals, analysts and brokers said over the weekend.

A Harita Securities senior analyst said a recent World Bank report on Indonesia's economy had encouraged foreign investors, who have been sidelined over the past three weeks, to reenter the market.

Asian Development Securities director Ikeda said the fundamentals of Indonesia's capital market were good compared to its neighbors.

"The fundamentals of Indonesia's capital market are okay, not jittery like in Thailand and Malaysia," he said.

The World Bank praised Indonesia's economy which performed very well last year with 7.8 percent growth, inflation falling to 6.6 percent and domestic and foreign investment remaining strong.

But the report said there were risks because the current account deficit could worsen and deregulation had lost momentum.

Ikeda said recent financial problems in Thailand could benefit Indonesia as fund managers shifted their money to other countries including Indonesia.

"We expect the market to move up slightly this week as new funds spills over into the market," Ikeda said.

"Presently, Indonesia is one of the strongest markets in the region," he said.

Other Asian markets are expected to be mixed with Bangkok's bourse jittery ahead of its new finance minister's economic policy, while Hong Kong grapples with China's move to control red chips, analysts said.

One broker said Indonesia's market would remain steady this week on continued strong interest in banking and automotive stocks.

Bahana Securities' Adriamnysah Chaniago said interest in the banking sector was strong because of its better-than-expected performance in the first quarter.

Another analyst said reports the President had approved a reduction in the number of state banks made the sector even more attractive to investors.

"That provides very positive sentiment to the market," he said.

The JSX composite index rose 13.604 points last week to 712.22 from 698.62.

Ikeda said the market could reach 720 points in the coming weeks.

The JSX composite index hits a record high of 717.56 points in late February.

Daily turnover rose 37 percent last week to 314.78 million shares, up from 228.2 million shares.

Daily transaction value surged 50 percent to Rp 613.68 billion (US$255.70 million), from Rp 416.1 billion.

State telecommunications firm Telkom rose Rp 25 over the week to Rp 4,000, Indosat was up Rp 150 at Rp 7,550, Astra international added Rp 450 to Rp 7,600, while Bank Internasional Indonesia gained Rp 150 to Rp 2,150.

Cigarette maker HM Sampoerna lost Rp 850 to Rp 10,000, while competitor Gudang Garam was down Rp 325 at Rp 9,975. Bank Negara Indonesia was down Rp 50 to Rp 1,600. (09)