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.