Stocks to remain shy due to Aceh problem

Stocks to remain shy due to Aceh problem

By Wachyudi Soeriaatmadja

JAKARTA (JP): As a positive resolution in the restive province
Aceh remains out of reach, share trading on the Jakarta Stock
Exchange (JSX) this week will continue to be subdued, stock
analysts said.

The analysts said investors had become wary of the slowness
and lack of serious attention from the administration of
President Abdurrahman Wahid, also known as Gus Dur, in handling
Aceh's problems.

"Gus Dur is seen by the market as having considerable
difficulty in solving Aceh's problems," said Jasso Winarto, an
executive director at Sigma Research.

Many have said the central government had not given the Aceh
issue the proportional attention it required to quell the strong
aspirations shown by the Acehnese for a referendum with an option
for independence.

Abdurrahman went abroad for his first international visit
following a one million strong peaceful rally in Banda Aceh that
demanded a referendum on self-determination for the province.

Abdurrahman planned to go on a second series of international
visits on Monday, leaving activists, students, ulemas and
legislators in Aceh to continue their demands.

This week Abdurrahman is scheduled for a three-country visit
to the Middle East and the Philippines despite the unsettled
domestic strife.

Jasso said Abdurrahman might have been well-informed of the
overwhelming proindependence sentiment in Aceh and that almost
every element in the province was against the central government.

Abdurrahman had apparently shown a reluctant pose toward
solving Aceh's problems, thus hurting market sentiment gradually
as a result, Jasso said.

He predicted the Aceh issue would erode the JSX Composite
index by five percent this week.

"Trading this week will be thin. There will be a lot of
selling, but not many people want to place their bids," Jasso
said.

He said the Aceh issue had become an "open concern" where a
wide range of investors in the market were extra cautious and
tended to refrain from buying.

Jasso acknowledged, however, there might still be those who
strongly believe it was far from reality that Aceh would separate
from Indonesia.

But generally, he said, the market this week would be
"emotional" due to the negative development of the Aceh issue.

An analyst at a foreign securities house said Aceh was
different from East Timor.

East Timor was a province that opted for independence and left
Indonesia after a recently held referendum.

"Aceh has a history with Indonesia. Aceh was an important part
of the nation's independence struggle against the former western
colonizer years and years ago," he said.

He said the tension in Aceh would only last temporarily and
that it would cease to negatively affect investor sentiment when
the market finally absorbed the shock.

"Perhaps the market will be bleak in the short term, but it
will get over it when the Aceh issue is correctly handled," he
said.

He warned, however, that the country's currency would be the
first fragile target if, in fact, Abdurrahman lost control of the
problem.

"The rupiah would ride down a very steep hill of a roller
coaster and this of course will drag the stock market down with
it," he said.

Abdurrahman has to find a way out and risk paying any price to
keep Aceh a part of Indonesia, he added.

The JSX Composite Index slightly decreased by 0.3 percent to
633.31 points last week from 635.23 points the previous week.

The average daily turnover last week decreased to 542.74
million shares, compared to 800 million the previous week.

The average daily transaction value also decreased to Rp
579.08 billion last week from Rp 795.6 billion the week before.

Last week's top gainers were PT Branta Mulia, rising 177.42
percent, PT Argha Karya Prima Industry, which went up 137.50
percent, and PT Bayer Indonesia SB, which went up 128.57 percent
by the end of the week.

The losers of the week were PT Panin Insurance, losing 19.23
percent, PT Panin Life which went down by 18.52 percent and PT
BBL Dharmala Finance, which lost 17.39 percent in the week.

The top brokerage firms by transaction value were PT Danareksa
Sekuritas with Rp 296.02 billion, PT ING Baring Securities with
Rp 295.64 billion and PT Vickers Ballas Tamara, which did Rp
259.18 billion in business.

The rupiah went up half a percent to close at 6,990 to the
U.S. dollar last week, compared to its close at Rp 7,020 the
previous week.