Surging stock index hits record high
The Jakarta Post, Jakarta | Fri, 08/20/2010 9:47 AM | Headlines
The price rally continued on the Indonesian Stock Exchange (IDX) on Thursday on the back of increased foreign purchases amid signs of further improvement in the country’s economy.
JP/IRMA
Securities analysts said the increase in foreign purchases helped further push up buying sentiment on the local market, which has been bullish in the past several days.
The rise in prices of blue chip shares, especially in the banking, mining and automotive as well as telecommunications sectors, further drove up the Jakarta Composite Index 38 points or 1.08 percent higher to close at all-time high of 3,105.
It was the first time the index breached the 3,100 level after it broke the 3,000 psychological barrier on July 21. The index had been fluctuating between 3,065 and 3,085 in the past several weeks, but had failed to pass the 3,100 level.
The price index has risen 20 percent so far this year, outperforming other Asian indices, including Singapore ’s Strait Times, which has risen 3 percent, and Tokyo ’s Nikkei, which has dropped as much as 10 percent and Hongkong’s Hang Seng, which remains flat, down only 0.1 percent.
The rupiah traded at 8,966 per dollar as of 4:13 p.m. in Jakarta , from 8,968 on Wednesday.
Securities analysts said the Indonesian equity market, as well as its bond market, had attracted inflows of foreign funds amid improvements in the country’s economy.
Foreign investors have bought US$1.45 billion more Indonesian shares than they sold this year, stock exchange data showed. Almost 70 percent of the transactions made this year were conducted by foreign buyers, the Indonesian Central Securities Depository (KSEI) said.
In his annual state address at the House of Representatives on Monday, President Susilo Bambang
Yudhoyono said the country’s economy would grow 6 percent this year, exceeding the initial target of
5.6 percent.
With the continued increase in domestic consumption, the promising increase in exports as well as the projected increase in new investments, the President estimated the economy would grow 6.3 percent in 2011 and between 6.7 percent and 7.7 percent per year until 2014.
Analysts also said foreign investors had shifted investment to Indonesia as the country’s stock market grew fastest in the region.
Standard Chartered Bank senior analyst Fauzi Ichsan told The Jakarta Post that global sentiment played a big role in the index’s record high. “Asian stock markets depend on US and European markets as most players are foreign investors,” he said.
The positive global sentiment, Fauzi added, incited more active trading in the local market Thursday, driving up prices of blue chip stocks.
Shares of the country’s largest telecommunication firm, Telkom (TLKM), gained 4.65 percent to close at Rp 9,000, following the firm’s announcement of a partnership in satellite services with PT Indosat (ISAT).
The country’s largest automotive distributor, Astra International (ASII), and second-largest lender, Bank Rakyat Indonesia (BBRI), were also among the top gainers Thursday, rising 1.03 percent and 4.86 percent to close at Rp 48,800 and Rp 9,700, respectively.
The buying mood was also affected by PT Berau Coal Energy’s successful market debut. Berau shares (BRAU), the most active on Thursday’s trading, gained 12.5 percent to close at 3,100.
Meanwhile, world stock markets mostly traded in a narrow range Thursday with little new data on the way to spur trading. Japanese stocks were the exception, enjoying a strong rebound amid mounting hopes that further stimulus measures would be announced soon.
In Europe, the FTSE 100 index of leading British shares was down 8.91 points, or 0.2 percent, at 5,293.96 while Germany ’s DAX fell 14.03 points, or 0.2 percent, to 6,172.28. The CAC-40 in France was 6.71 points, or 0.2 percent, lower at 3,641.22.
Wall Street was poised for a fairly subdued opening. Dow futures were up 2 points at 10,354 while the broader Standard & Poor’s 500 futures rose 1.6 point at 1,088.30. Earlier in Asia , most stock markets ended the session modestly higher. Japan ’s Nikkei 225 stock average was the standout, closing 122.14 points, or 1.3 percent, higher at 9,362.68.
There is growing market speculation that the Bank of Japan is examining fresh measures to boost liquidity to rein in the appreciation of the yen, which has been a major concern for many of Japan ’s export-dependent businesses.
CMC Markets analyst Michael Hewson said speculation of an easing in Japanese monetary policy weakened the yen as well as giving the Nikkei a boost — by mid-morning London time, the dollar
was trading 0.2 percent higher at ¥85.52. (est)
