Stronger financial reports to help lift stock prices

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)