Mon, 07 Apr 2003

`Stocks likely to keep rising'

The Jakarta Post, Jakarta

The Jakarta Composite Index, which has risen over the past two weeks, will likely continue to go up this week amid optimism that the Iraq war will be short, a stock analyst said.

Hengky Sumarli, head of sales at Jakarta-based Tim Eng Securities, said on Sunday the progress made by the U.S.-led forces in Iraq over the past several days had led many people to believe that the war would not last long.

"It is positive news for the market. I think the rising trend (of the index) is likely to continue this week, but the market will still move in a narrow range," Hengky told The Jakarta Post.

The latest reports said U.S.-led ground forces had taken control of the Saddam Hussein International Airport outside of Baghdad and were entering the capital.

The index closed two weeks ago above the 400 level at 404.43, then rose again last week to close at 405.68.

Last week's daily volume averaged 207.14 million shares worth Rp 177.482 billion (US$19.95 million), compared to 258.16 million shares worth Rp 232.253 billion the previous week.

Hengky said, however, that even if it continued to rise, the progress in the index would be limited because of the absence of fresh leads at home and fears over the deadly Severe Acute Respiratory Syndrome (SARS).

"SARS will not only hurt people's consumer confidence and the tourist sector worldwide, but will also prompt fears that it will negatively affect China's booming economy," he said.

The disease has claimed hundreds of lives worldwide, mostly in China where it first appeared late last year.

It is feared that the disease could slow China's economy, which would in turn further damage the already fragile world economy.

In the currency market, the fact that antiwar rallies across the country have remained peaceful will mean another solid showing for the rupiah this week, a dealer said.

"Previous market concerns that the war could prompt a furious backlash have been proven false. This will create a positive sentiment for the rupiah," the currency dealer said.

He said the rupiah would hover between 8,885 and 8,910 to the U.S. dollar this week, relatively the same range as the previous week.

The rupiah closed last week's four-day trading slightly stronger at 8,885 against the U.S. dollar, compared with 8,905 the week before.

Trading was closed on Wednesday because of a public holiday.