Stocks, rupiah to get firmer: Analysts

Stocks, rupiah to get firmer: Analysts

A'an Suryana
The Jakarta Post
Jakarta

The Jakarta stock market is expected to move higher this week
driven mainly by cheap bluechip shares, analysts say.

Zulfikar, a stock analyst at brokerage firm PT Mandiri
Sekuritas, said over the weekend that among the bluechip
companies considered to be undervalued were auto conglomerate PT
Astra International, and telecommunications firms PT Indosat and
PT Telkom.

Shares in Indosat would likely move up this week after the
government sold a 41.9 percent stake in the state-owned company
to Singapore Technologies Telemedia (STT) for Rp 12,950 per
share, compared to Indosat's book value of around Rp 10,000.

"Having known that the share value in the market had been
hovering at around Rp 9,300 to Rp 9,500 since the purchase
agreement last week, investors would continue pursuing the shares
until it stands at a normal value of Rp 10,000," he said.

According to Zulfikar, as year 2002 drew to a close, the
management of listed companies would try to polish the companies
performances through window-dressing, a move that would also help
lift sentiment in bluechip firms.

Shares in Telkom might appreciate after the government
announced last week that it would move ahead with plans to
increase phone charges by an average of 15 percent in January
2003.

"As the shares of the blue chip companies move up, it would
lift the Jakarta stock index," Zulfikar said.

Zulfikar predicted that the Jakarta stock index would move up
10 to 15 points this week.

The Jakarta stock exchange composite index closed up 1.1
percent higher on Friday at 425.120 driven by bluechip firms like
Indosat, Telkom and Astra.

The market this week will only open for trading on Monday and
Friday due to the Christmas holiday.

Stock analyst Ferry Latuhihin said a brighter domestic
economic outlook and stable international stock markets would
contribute in strengthening sentiment in the local stock market.

"The U.S. economy is bouncing back. This is creating
confidence in the international market," he said.

Switching to the rupiah, Ferry said that rupiah would get
firmer at a range of Rp 8,800 to Rp 8,900 per U.S. dollar.

He said that the sale of Indosat shares has increased the
dollar supply at home, which in turn would strengthen the rupiah.

He added that the weakening of sentiment against the U.S.
dollar would also bode well for the rupiah.