Index remains hot, at highest level since March 2000
The Jakarta Post Jakarta
The Jakarta Composite Index ended higher on Friday for the fifth consecutive day, thanks to sustained heavy buying by foreign investors on blue chips.
The index closed at 582.32 points, 1.2 percent higher than Thursday's closing, with total value of Rp 1.3 trillion (US$156 million), breaking the Rp 1 trillion level for the third day in a row.
The current level is the highest since March, 2000. The index has risen by around 33 percent since the start of the year.
Dealers pointed to the country's relatively stable macroeconomic picture as one of the reasons behind the influx of foreign funds into the local market in the past three days, with CLSA Indonesia, BNP Paribas and ING Securities Indonesia cited as the most active buyers.
The falling SBI interest rate also makes the stock market more attractive for investors seeking quick returns. The central bank this week slashed its rate to a historic low of 8.83 percent, on benign inflation.
The active buying started on Wednesday, which saw the trading value jump to over Rp 1 trillion, far surpassing the normal daily value of between Rp 300 and Rp 400 billion.
At intraday trading on Friday, the index even reached a record high of 590.34, but massive sell-offs -- mostly by domestic investors -- in the afternoon session pulled the index down.
At the close, decliners topped gainers 75 to 64, with 94 stocks unchanged.
The country's state telecommunications firm Telekomunikasi Indonesia (Telkom) and auto producer Astra International led the gainers, rising by 5 percent and 4.1 percent, respectively.
Telkom hit an all-time high at of Rp 5,300 per share, while Astra at Rp 4,400.
Other gainers were instant noodle producer Indofood, rising by Rp 25 to Rp 750, and rival Unilever, which closed Rp 25 higher to Rp 3,450.
Other market movers were not that lucky, having to whether heavy profit-taking.
Indosat, another state-owned telecommunications firm, lost 1.1 percent of its value to Rp 8,700.
The country's two largest cigarette makers Gudang Garam and Sampoerna also bore the brunt of the profit-taking, shedding Rp 250 and Rp 25 respectively to close at Rp 10,550 and Rp 4,350.
Asked about the outlook for next week, a dealer at a state- owned bank said: "Even though there is overall positive sentiment, I expect the index to be under slight pressure on profit-taking after rising significantly this week."
In over three days of heavy buying, the index surged by 8.6 percent.
Meanwhile, in the currency market, the active trading in the stock market failed to get the rupiah released from the pressure arising from the dollar short covering ahead of the weekend.
The rupiah ended lower at 8,495 per dollar on Friday against 8,480 the day earlier.
"The firmer U.S. dollar against regional currencies also helped the weaker closing of the rupiah," said a dealer, but was quick to add that the prospect of the local unit remained good on the planned bond issue on Sept. 9.
The government plans to issue Rp 5 trillion in bonds to help finance the maturing bonds.