Jakarta shares extend their rally

The Jakarta Post, Jakarta

Jakarta shares extended their rally on Thursday to two days as foreign and local investors purchased cheap stocks whose prices had been battered by the Marriott hotel bombing incident earlier in the week, dealers said.

The main Jakarta Composite Index rose by 2.8 percent to 508.27, higher than Monday's close of 503.94, a day before the terror attack occurred. The index dropped by 3.1 percent to 488.53 on Tuesday.

Comments from senior economics ministers that the bombing would not hurt the country's economic recovery encouraged bargain hunters to purchase blue chips.

Coordinating Minister for the Economy Dorodjatun Kuntjoro- Jakti, Minister of Industry and Trade Rini Soewandi and State Minister of Culture and Tourism I Gde Ardika visited the Jakarta Stock Exchange on Thursday morning at the start of trading in a campaign to help calm nervous investors.

"The death sentence handed down (by the court on Thursday) to Amrozi was also welcomed by the market," said one dealer.

Amrozi has been held responsible for last year's Bali bombing, which killed more than 200 people, mostly foreign tourists.

The rupiah also closed stronger against the dollar for the second straight day as calm began to return to the market. The local unit closed at Rp 8,590, compared with 8,600 the day before.

Foreigners were seen as net buyers, indicating that many are still confident about investing in Indonesia.

Gainers led decliners 128 to 21, with 59 stocks unchanged. Volume was 1.8 billion shares valued at Rp 1.1 trillion (US$132.53 million).

State-owned telecommunications company PT Telkom and car maker PT Astra International were among the top gainers, respectively advancing by 4.1 percent to Rp 4,425 and 6.2 percent to Rp 3,875.

Investors were also seen aggressively buying shares in second- line property companies on expectation that they would book higher sales after a recent fall in interest rates.

But one dealer warned that the relatively strong rally in the stock market was not a "genuine trend" as overall sentiment remained weak, also affected by the regional market decline.

He pointed out that most of the active investors during the day's trading were bargain hunters, not long-term investors.

He expected the market would be cautious on Friday as investors normally took profit ahead of the weekend.