Stocks likely weak on lack of incentives

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)