Jakarta stock index soars to near four-year high
Rendi A. Witular, The Jakarta Post, Jakarta
The Jakarta stock index jumped by 7.36 points on Thursday, hitting its highest level in nearly four years on positive regional sentiment and the privatization of state-owned gas company PT Perusahaan Gas Negara (PGN).
The Jakarta Composite Index ended higher at a 47-month high of 653.32 points from 645.96 on Wednesday, with trading value reaching Rp 969 billion (US$114 million), up from Rp 953 billion the previous day.
The index soared to a high of 656.72 on Jan. 24, 2000, before dropping further.
Stock analyst Ferry Latuhihin from Danareksa Securities said the surge was mainly attributable to the privatization of PGN, along with rising confidence among equity investors on the revival of the global economy.
He said that if there were no security problems at home, the index was expected to reach 700 points at the end of this year or early next year.
Stock traders said that the planned listing of PGN shares on the Jakarta Stock Exchange and the Surabaya Stock Exchange on Dec. 15 had triggered buying in mining shares, which helped push the stock index higher.
The government sold shares in PGN through an initial public offering (IPO) process earlier this week.
Shares in mining companies such as PT Inco surged by Rp 1,400 to Rp 26,500; PT Aneka Tambang by Rp 75 to Rp 1,525; PT Bumi Resources by Rp 90 to Rp 400; and PT Tambang Batubara by Rp 25 to Rp 700.
The surge in several bluechip shares also helped drive the index higher. Shares of state-controlled telecommunications company PT Telekomunikasi Indonesia (Telkom) jumped by Rp 150 to Rp 6,200, with its rival PT Indonesian Satellite Corp. (Indosat) tailing behind with an increase of Rp 400 to Rp 13,800.
The country's second largest cigarette producer PT HM Sampoerna surged by Rp 25 to Rp 4,075 and automotive assembler and distributor PT Astra International by Rp 25 to Rp 4,550.
Danareksa Research Institute said in a latest report that the high profile lending scandal at the publicly listed Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) had little impact on the stock market because of the generally positive sentiment in the country's improving macroeconomic outlook.
Analysts have also said that falling interest rates at home have made investment in stocks more attractive as the declining interest rate cut down returns from investment in bank time deposits.
The relatively calm political situation ahead of the general election next year had also supported investor confidence, the analysts said.