Stronger financial reports to help lift stock prices

JAKARTA (JP): Recently released stronger financial reports of some public companies will help boost trading sentiment on the Jakarta Stock Exchange (JSX) this week, equity analysts said.

"The better than expected performance of several companies in 1999 is perceived by the market as a sign of economic growth," said one analyst, adding that the encouraging financial reports indicated brisk prospects of the country's business activities for this year.

A great number of companies which released their financial statements late last week showed a better than expected 1999 performance.

Other analysts -- observing the mild technical rebound late last week -- said the expected improvement in the trading sentiment might lead to a surge in the Composite Index, which showed no major change last week.

But the analysts said that a number political issues, such as President Abdurrahman Wahid's controversial move to remove his two economic ministers, would still serve as a negative factor in the trading activities.

"Again, President Abdurrahman is playing his game of unpredictability. We don't know what he is going to do next," said an analyst with a local securities house.

This, he added, would further weaken investors' sentiments in Indonesia who earlier had been undermined by the country's credit rating downgrade by the international credit rating agency Standard & Poor's.

The rating agency downgraded Indonesia's long-term foreign- currency credit ratings in mid April, from triple-C-plus to selective default following the Paris Club accord.

However, Lin Che Wei of PT SG Securities, said the downgrade was temporary as it happened out of a mere technicality problem.

"The rating downgrade hit us because we failed to forward full rescheduling documentation to the rating agency following our success at the Paris Club debt talks," he said.

"With such a fact, a number of investors have begun to hold confidence that the rating reversal would happen soon," he said.

Another analyst said a rebound late last week on the U.S. Nasdaq would strengthen the sentiments on the local exchange, however, reminded the higher-than-expected economic data released recently by the U.S. government would be the next fear among investors in the regional exchanges as well as in the JSX.

"A clear sign of stronger consumer buying power in the U.S. would prompt its government to take aggressive interest-rate hikes in its next chance, thus, it may hurt the stock market," he said.

In very recent cases, bearish U.S. stock markets -- with their contagion effects -- hurt most other stock markets around the world, including those in Asia and of course the JSX.

Currency dealers expected the rupiah would trade against the greenback in a stable range this week.

Late last week some exporters sold their dollars to the market, which were quickly absorbed by local demand as local companies needed dollars to service their maturing overseas debts.

The rupiah strengthened slightly last week to Rp 7,935 rupiah, compared to Rp 7,965 the previous week.

The JSX index stayed flat last week to close at 526.73 points, compared to 526.39 the previous week. The daily average transaction value decreased to Rp 323.46 billion last week, compared to Rp 458.86 billion during the previous week.

The daily average turnover also decreased to 349.8 million shares from 533.7 million shares the previous week.

Last week's top gainers were PT Putra Surya Perkasa, whose shares were up by 50 percent, PT Sucaco, 28 percent, and PT Bank Bali, 25 percent.

Cash dividend announcements were made by PT Plaza Indonesia Realty, PT Bayer Indonesia SP, PT Bayer Indonesia SB and PT Bahtera Adimina Samudra.

The week's big losers were PT Kridaperdana Indah, whose shares fell by 66.67 percent, PT BDNI Capital Corp., 45.45 percent, and PT Keramika Indonesia, 28.57 percent.

Top brokerage firms by transaction value were PT Vickers Ballas Tamara with Rp 297.74 billion in transactions, PT Ciptadana Sekuritas, Rp 154.54 billion, and PT Peregrine Sewu Securities, Rp 146.66 billion. (udi)