Stocks likely weak on lack of incentives

JAKARTA (JP): Several analysts predicted a weak performance on the Jakarta Stock Exchange (JSX) this week, to be triggered by a further decline in Astra International's share price and high concentration on the upcoming public offering of the state-owned Bank Negara Indonesia 1946.

"There is no more incentive even on Astra because business tycoon Bob Hasan should have realized his "takeover" plan this week," a director of the joint-venture PT Bakrie Securities, Dandossi Matram, said.

"We will see lack of buying interest as investors will prefer to sideline while waiting for BNI's share offering," he added.

Dandossi told The Jakarta Post over the weekend that many investors had stopped speculation on Astra because they believed that Bob Hasan's PT Nusantara Ampera Bhakti (Nusamba) would not buy more Astra shares next week.

According to Dandossi, investors had also reduced their activities on most counters last week following the announcement of BNI's share offering price.

BNI announced on Thursday that the Ministry of Finance's privatization team had established the final price for the planned public offering of the bank's 1.08 billion shares at Rp 850 (36 U.S. cents) per share. The shares will have a nominal value of Rp 500 each.

"It's a very encouraging pricing policy. We previously speculated that the final price would range between Rp 1,000 and Rp 1,100 per share," Dandossi said.

Meanwhile, an analyst with a foreign brokerage said that the market is now waiting for Nusamba's next move on Astra before making any decision on whether to buy back or sell more of their Astra shares.

He said that although Bob Hasan has stated that Nusamba is wanting to create a synergy with other shareholders to increase shareholders value, there is strong speculation in the market that the government should have backed up Nusamba's move for political purposes.

Nusamba is a diversified conglomerate established by three foundations headed by President Soeharto.

"It seems to me that the government needs a controlling power over Astra to help it handle the national car dispute in the forthcoming World Trade Organization's meeting," the analyst said.

Japan, the United States and the European Union have filed complaints with the World Trade Organization for Indonesia's national car policy allowing a company owned by Soeharto's son Hutomo Mandala Putra to develop a national car with an exemption of import duties and luxury tax.

The analyst added that by controlling Astra, which produces and sells Japanese vehicles, the government is now in a more safe position to bargain with Japan.

Dandossi also predicted that Astra's share price, which was down Rp 50 last week, may decline further to the level of Rp 3,000 this week.

JSX share prices slightly rose by 0.2 percent last week with its composite index closing 1.13 points higher at 571.33 points, due mainly to the strong performance of cigarette maker HM Sampoerna.

HM Sampoerna's share price increased by Rp 2,500 last week to close at Rp 21,050 after hitting a high of Rp 21,825 on Wednesday.

One of the two analysts said that HM Sampoerna's strong performance was closely related to its decision to sell its Astra shares.

Total trading volume during the week were 583 million shares valued at Rp 1.4 trillion.

Foreign buy transactions amounted to Rp 737 billion as compared to sell transactions of Rp 621 billion.

Astra was recorded as the most active stock with 68 million shares traded at Rp 289 billion. Its share price decreased by Rp 50 to Rp 3,950.

The newly-listed PT Daya Guna Samudra came second with a trading value of Rp 156 billion.

Other most active stocks in value were Sampoerna (with a trading value of Rp 132 billion), Medco Energy (Rp 92 billion), Telkom (Rp 74 billion), Bakrie & Brothers (Rp 44 billion), Bhuwanatala (Rp 39 billion), Argha Karya (Rp 38 billion), Rig Tenders (Rp 25 billion) and Gudang Garam (Rp 25 billion). (alo)