Selected Shares 2007: Banking, Property and Automotive
Tuesday, 02 January, 2007 | 16:05 WIB

TEMPO Interactive, Jakarta: Shares in banking, property and the automotive sectors will become the most important shares for investors this year. The estimate was based on investors' optimism on the future of the Jakarta Stock Exchange (JSX) in 2007 since the composite stock price index at the JSX was capable of providing the restitution rate of 55.30 percent during 2006. About half of the market analysts projected that the index can touch the level of 1,900, or even 2,000.

Analyst of PT Sinarmas Sekuritas Alfiansyah said that issuers' shares that will be sought by investors in 2007 include the banking sector. Purchase will be selectively aimed at top rank banking shares such as Bank Mandiri, Bank BRI, Bank Danamon and Bank BCA. In addition, purchase on second-level bank shares will be aimed at Bank Niaga and Bank Panin.

According to Alfiansyah, the financial performance of Bank Mandiri will be better in line with the decrease of the interest rate that will be followed by the decrease of deposit interest. In addition, it is possible that the decrease of loan interest will still be delayed a little. “So, the banking world will enjoy a higher margin of profit,” he told Tempo last week.

Analyst Recapital Asset Management Satrio Utomo also viewed that the performance of JSX this year will have a good prospect, minimally during the first quarter of 2007. According to him, the chance for the index to touch 1,850 is still open as long as the position of 1,800 can be maintained. “The market price earning ratio will be as much as 15-18 times,” said Satrio. It reflects normal share price.

He suggested that investors collect issuers' shares that are benefited by an interest rate decrease such as banking, property and automotive sectors. “Shares of Bank Mandiri, Astra International, Ciputra Group, Sinarmas Group and Summarecon Agung should be reasonable,” he said. Bank Mandiri's success of suppressing non performing loans will make its ratio decrease.

In addition, an analyst of PT BNI Securities R. Fitri Murniawati said that the selected shares of 2007 include Telkom, Indosat, Citra Marga, Adhi Karya, Total Persada and Semen Gresik. She also suggested that investors purchase shares of the agrobusiness sector—such as Astra Argo Lestari, PP London Sumatra and Bakrie Sumatera Plantations—and mining sector such as Inco, Antam, Timah and State Gas Company. “The trend of the palm oil price increase and the government's plan of selling state enterprises' shares will stimulate the market.”

MUCHTAR WIJAYA (PDAT)