Stock trading to recover in second half
Stock trading to recover in second half
JAKARTA (JP): The dormant trading on the Jakarta Stock Exchange (JSX) is expected to recover in the second half of this year on the impact of the projected increase in corporate earnings and in the improvement of trading transparency, say securities analysts.
Analysts of both domestic and foreign securities companies estimate that the JSX Composite Index will break the psychological barrier of 500 before the close of the year, or 20 percent above the current level of 415.
The push factors, according to the analysts, will include the betterment in the global monetary climate, the improvement in earnings of listed companies and the advancement in the trading transparency.
Nurkhamid, the chairman of the Jakarta Brokers Club, estimated that the yen appreciation, the major cause of the sluggish stock trading on the world's stock markets, will gradually ease and stabilize at a favorable level within the next two months.
"No governments like the yen appreciation to continue and that's why I am optimistic that, sooner or later, they will come up with an effective measure to curb the yen surge," he said, adding that the more stable yen is expected to further revitalize trading activities.
Nurkhamid, who is also the director of PT Arga Arta Securitas, said that foreign investors, the dominant factor in the trading activities on the JSX, have become more active in the recent weeks.
"Trading activities are, in fact, getting more active as many foreign investors benefit the low price levels. I expect the upward trend to continue," he said.
Bottom
Most share prices have reached their bottom levels as the result of continued drops in the last three months, pushing down the JSX Composite Index to fall to this year's lowest level of 415, down from 470 at the opening of the trading in January.
Bill Foo, the president of Schroders Indonesia, also expressed confidence over the bright outlook of the local stock exchange in the second semester of this year.
The improvement in stock trading activities will be in conformity with the country's estimated more stable monetary system, he said, adding that the advancement in the corporate earnings would also play a major impulse in the trading activities.
Nurkhamid said the planned introduction of an automated trading system and a new capital market law in the second half of the year would also become important push factors.
"The new trading system and new legal instrument will ensure a better trading transparency. This is expected to significantly improve the public confidence," he said.
The JSX is expected to begin using an automated trading system this year, enabling the exchange to handle 50,000 transactions per day and to carry out 40,000 buy and sell orders per hour.
In addition, the government recently submitted the draft law on the capital market to the House of Representatives (DPR) as part of its commitment to provide a better legal foundation to the country's capital market activities.
The draft law, which will replace the outdated 1952 Capital Market Law, will soon be deliberated by the House for approval. (hen)