Index closes 2nd best in region<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The Jakarta Composite Index surged 63 percent higher this
\nyear, as it wrapped up its year-long impressive performance by
\nbreaking through the level of 700 on the last day of trading on
\nTuesday -- the highest level in just under four years.<\/p>\n
The Index also ended the year higher at 691.895 on Tuesday
\nfrom 424.945 at the start of the year, making it the second-best
\nperformer in Southeast Asia, after Thailand's stock exchange in
\nterms of earnings in U.S. dollars.<\/p>\n
The Index, however, failed to post another record-high on
\nTuesday's trading as it ended lower by 0.2 percent, or 1.138
\npoints from 693.033 on Monday, although for most of the session
\nit was traded higher and managed to pass the psychological level
\nof 700.960.<\/p>\n
Analysts said late profit-taking in several bluechips had
\ndriven the Index down, but the closing remained the highest since
\nJan. 18, 2000.<\/p>\n
President of the Jakarta Stock Exchange Erry Firmansyah said
\nthat the sharp decline in the central bank's benchmark interest
\nrate and steady improvement in key areas of the domestic economy
\nhad contributed to the increase in stock trading.<\/p>\n
"The low interest rate has made the stock market more
\nattractive for portfolio investment, especially for those seeking
\nquicker and higher returns," said Erry on the sidelines of a
\npress conference on the year's stock market performance on
\nTuesday.<\/p>\n
He also said that the surge in the Index, coupled with the
\nlisting of three giant state-owned enterprises, had contributed
\nto the jump in market capitalization, which had increased by
\n72.35 percent to Rp 463 trillion (US$54.4 billion), from Rp 268
\ntrillion at the start of the year.<\/p>\n
This year's improved Index performance was also reflected in
\nits average daily transaction value, which reached Rp 516.7
\nbillion, higher than last year's average of Rp 429.2 billion.<\/p>\n
For the full year, funds raised from companies' initial public
\nofferings had also increased to Rp 6.22 trillion from Rp 1.12
\ntrillion last year, with only six new companies listed on the
\nstock exchange this year, from 22 last year.<\/p>\n
The Index has also shown itself to be resilient this year,
\neven to terrorist attacks. The bombing of the JW Marriott Hotel
\nin the Mega Kuningan business district, South Jakarta, only
\ncaused a temporary slide in the Index.<\/p>\n
As for next year, Erry said that there was still room for the
\nIndex to climber further above 700, because its price earning
\nratio (PER) was still low compared with those bourses in
\nMalaysia, Singapore and Thailand.<\/p>\n
A stock analyst with BNI Securities, Adrian Rusmana, said that
\ndespite its limited direct impact on the country's overall
\neconomy, the rally of the Index should be a measure to gauge
\ninvestor confidence in the country's economy.<\/p>\n
However, he explained that it remained to be seen whether the
\npositive performance of the Index indicated the return of foreign
\ninvestors' confidence in the country.<\/p>\n
Adrian said that the surge in the Index this year was mainly
\ncaused by the rally trend on key global stock markets in response
\nto lower indicative interest rates around the world.<\/p>\n
"The jump in the Index this year was caused mainly by global
\nsentiment. It cannot fully reflect the country's economic
\nperformance," he said.<\/p>\n
The stock market will be closed on Wednesday and Thursday for
\nthe New Year's holiday, and will be back in business on Jan. 2
\nwith President Megawati Soekarnoputri scheduled to mark the first
\ntrading for the year.<\/p>",
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