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.