Trading activities hoped to be bullish this week

Trading activities hoped to be bullish this week

JAKARTA (JP): Trading activities on the Jakarta Stock Exchange
(JSX) are expected to be bullish this week following the
conclusion of three weeks of negotiations between the government
and the International Monetary Fund (IMF), analysts said.

They said the signing of the new agreement with the IMF late
last week should encourage investors to reenter the market.

"The signing of the new deal should boost investor confidence
in the local market," research director of Socgen Crosby
Securities Goei Siauw Hong told The Jakarta Post over the
weekend.

He said the market had been anxiously awaiting the
announcement of full details of the new measures to be taken as
part of the government's efforts to improve the country's dire
economic situation.

The IMF and the Indonesian government signed up to a 20-point
supplementary program of economic and financial reform last week,
which revised the 50-point memorandum of understanding signed by
President Soeharto on Jan. 25.

The new agreement includes commitments from the Indonesian
government to draft bankruptcy and anti-monopoly laws, form a
special court to oversee bankruptcy proceedings, and develop a
plan to resolve the problem of US$74 billion in foreign debt
which is crippling the country's corporate sector.

The government moved instantly to implement some of the
promised reforms by announcing preliminary measures to be taken
on corporate debt, the merger of two state bank, and the
establishment of a company to manage ailing banks' assets.

Companies are now obliged to report offshore debts to Bank
Indonesia, the central bank.

An analyst with a joint-venture brokerage house said that the
move would provide investors with a better insight to private
sector debt, which has been identified as a major cause of the
economic crisis.

"It will also help investors with their portfolio strategies
in the local exchange," he said.

The JSX composite price index fell 1.07 percent to 527.58
points last week, down from 533.30 points the week before.

Daily turnover for the three trading days last week averaged
491.39 million shares, compared to the 549.45 million shares
which changed hands the previous week.

Average daily transaction value declined to Rp 551.46 billion
(US$68.93 million), down from Rp 639.02 billion the previous
week.

Local stock and currency markets were only open for three days
last week. The market was closed Tuesday for the Moslem Idul Adha
holiday and on Friday for Good Friday.

Most blue chip stocks ended lower last week, with state-owned
satellite operator PT Indosat sliding by Rp 575 to Rp 12,825,
cigarette maker HM Sampoerna by Rp 725 to Rp 6,775 and its
competitor Gudang Garam by Rp 700 to Rp 11,500. (aly)