Shares surge amid campaign calm<\/p>\n
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX)
\nreentered the 600 psychological barrier on Friday, riding on the
\nwrap up of the country's smooth campaigning period.<\/p>\n
On the last day of the campaign period, the JSX Composite
\nIndex rose 4.2 percent to close at 612.37 points, with a
\ntransaction value of Rp 843.7 billion (US$104 million).<\/p>\n
The Indonesian rupiah was also stable, closing a bit stronger
\nat Rp 8,105 against the U.S. dollar, compared to Rp 8,190.<\/p>\n
Currency dealers said local participants bought back the local
\nunit following the relatively peaceful campaigning during the
\nlast two weeks.<\/p>\n
"Most local players were confident Monday's balloting would be
\npeaceful. So, they saw no reason to stay long on the dollar," a
\ndealer with a local private bank said.<\/p>\n
Bank Indonesia governor Sjahril Sabirin said on Friday the
\nrupiah should strengthen to the Rp 7,000 level against the
\ngreenback after the election.<\/p>\n
"The campaign went very smoothly, in which there were no
\nmeaningful disturbances. We expect the same thing will happen
\nafter the election to support the rupiah to go to the Rp 7,000
\nlevel," Sjahril said.<\/p>\n
Friday was the last day of campaigning. The day, however, was
\nmarred by incidents in several areas in Jakarta, where supporters
\nof the ruling Golkar party were attacked. Nevertheless, the
\ncampaigns during the last two weeks were generally peaceful.<\/p>\n
The relatively non-violent campaigning also boosted sentiments
\non the local stock markets, stockbrokers and analysts said.<\/p>\n
However, more skeptical market analysts said there were signs
\nthat the government was boosting the market through buying in
\nstate-owned companies.<\/p>\n
A research analyst at Panin Securities, Bona H.L. Tobing,
\nwarned that the high index would not be sustained if it was
\nbolstered more by market psychology rather than fundamentals.<\/p>\n
"The bullish tendency of the market is not about fundamental
\neconomy, but market psychology," he said.<\/p>\n
Bona said investors were too hasty in responding to the final
\nday of the obviously non-violent campaign period.<\/p>\n
"They should realize that the journey has not ended yet. We
\nstill have the election day itself," he said.<\/p>\n
He added that after the elections, Indonesians have to wait
\nanother three months to see a new president, which would create
\nanother uncertainty.<\/p>\n
"The country's political risk will be at a minimum after the
\nnew Cabinet is formed by the next elected president," he said.<\/p>\n
Adrian Rusmana of BNI Securities said that the market was
\nboosted by investors' greater confidence that the country's
\nlandmark election on Monday would run smoothly.<\/p>\n
Nevertheless, politics was not the only factor for the market
\nsurge, he said. The market was also pushed by a buying spree on
\nsectoral stocks, especially agribusiness stocks.<\/p>\n
"Agribusiness shares gained attention in response to the
\ngovernment's move of lowering the export tax on crude palm oil,"
\nhe said.<\/p>\n
The government reduced export tax on crude palm oil to 30
\npercent from 40 percent to stimulate the export of the commodity
\non Friday.<\/p>\n
Adrian also added that continued buying of blue chips further
\ndrove the index up. In addition, banking shares which lost ground
\nin the past few weeks finally found an improved sentiment on
\nFriday.<\/p>\n
"Investors were initially not too happy when the government
\nfirst announced the result of bank recapitalization last week,
\nbut then we gradually saw a nice progress," he said.<\/p>\n
Some blue chip shares had good gains on Friday, with
\nmarket leader Telkom going up by 8.9 percent to close at Rp 4,275
\nand Indosat rising 1.4 percent to Rp 16,825.<\/p>\n
Banking shares also had good momentum.<\/p>\n
Bank Pan Indonesia (Panin) moved up 22.9 percent to close at
\nRp 1,475, while Lippo Bank edged up 7.1 percent to Rp 375, and
\nBank Bali was up 6.3 percent to Rp 1,275.<\/p>\n
Palm oil producer Astra Agro Lestari's shares were up 6.8
\npercent to close at Rp 2,350 following the cut to crude palm oil
\nexport tax.<\/p>\n
It is difficult, however, to predict what direction the market
\nwill go, but Adrian noted that foreign investors would likely
\nstay on the sidelines until the results of the elections were
\nknown.<\/p>\n
"Investors could pose a wait-and-see attitude, observing the
\noutcome of the elections in terms of who gets seats at the House
\nof Representatives and what possible effects will follow," he
\nsaid. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/shares-surge-amid-campaign-calm-1447893297",
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