Jakarta stock index hits historic high
Dadan Wijaksana, The Jakarta Post, Jakarta
Hopes of a peaceful presidential election on July 5 and a better economic future has hyped the already bullish sentiment in the stock market and lifted the Jakarta stock index to an all- time high on Tuesday.
Hefty gains in select blue-chip shares lifted the index to a historic high of 810.86 points, a 3.31-percent jump from the day before, upon the latest developments in the political scene, which dealers and traders claimed "market-friendly".
"I guess the market warmly welcomes the pairing of SBY and Kalla (in the presidential polls) as market-friendly," said a dealer at a top national bank, referring to former senior security minister Susilo Bambang Yudhoyono by his acronymic nickname and former coordinating minister for people's welfare Jusuf Kalla.
"They represent not only relatively clean figures, but also reform-minded ones, which is what the market wants," he added, and speculated that the pairing would boost sentiments for a peaceful July election, as it fulfilled the people's wish for leaders who could bring changes to the country.
The two former coordinating ministers have officially paired to make a bid for the national leadership.
Indonesia will hold its first-ever direct presidential election on July 5, with a runoff scheduled for Sept. 20.
Various surveys show that Susilo poses a serious contender against incumbent President Megawati Soekarnoputri, who chairs ruling party the Indonesian Democratic Party of Struggle (PDI-P).
Another boost was an upbeat economic prospect from the government, with Minister of Finance Boediono saying earlier in the day that the economy could grow by around 5 percent in 2005 -- better than the 4.1 percent in 2003 and the projected 4.8 percent for this year.
Boediono said the assumption, included in the 2005 state budget, would be discussed further by the Cabinet within the month before being submitted to legislators in early May.
Tuesday's trading saw a staggering 2.2 billion shares exchange hands at a total value of Rp 1.6 trillion (US$195 million) -- both record highs also.
State-owned telecommunications firm PT Telkom gained Rp 600 on Tuesday to close at Rp 8,600, followed by a Rp 500 gain posted by giant cigarette maker Gudang Garam, which closed at Rp 14,800.
The nation's biggest carmaker, Astra International, was also among the gainers, up by Rp 450 to Rp 5,800.
More top companies are set to announce first quarter earnings next month, a move that has also helped to boost sentiment.
In the currency market, the rupiah closed slightly weaker against the U.S. dollar on suspected dollar purchases by importers, ending at 8,615 from 8,605 the day before.
Dealers expect the rupiah to trade between 8,590 and 8,625 on Wednesday.