JSX rallies for sixth day, off to fresh highs

JSX rallies for sixth day, off to fresh highs

Rendi A. Witular, The Jakarta Post, Jakarta

The Jakarta Composite Index (JSX) ended higher for the sixth
consecutive day on Monday, with foreign investors remaining
confident over the country's macroeconomic condition while
pouring more money into the bourse.

The index rose by 0.8 percent, or 4.734 points, to 587.057,
the highest close since March 29, 2000. However, the value of
shares traded declined to Rp 871.8 billion (US$103 billion) from
Rp 1.3 trillion on Friday.

"There is still huge confidence among foreign investors,
especially over the country's improving macroeconomic indicators
such as lower interest rates and relatively low inflation," said
Hendra Bujang from Mega Akses Securities.

The benchmark rate on central bank one-month SBI promissory
note dropped to a record low of 8.83 percent last week and the
annual inflation rate stood at 6.38 percent in August, the lowest
in two decades.

Hendra said that currently, foreign investors held 80 percent
of shares circulating in the bourse, compared with 60 percent in
July.

Foreign-affiliated broker firms such as DBS Vickers
Securities, CLSA (Credit Lyonnais Securities Asia) Indonesia and
Kim Eng Securities helped the Index bounce back from its lowest
point of the day at 574 in mid-session trading.

DBS Vickers, for example, bought around 4.67 million shares of
blue-chip, state-owned telecommunications company PT
Telekomunikasi Indonesia (Telkom), worth Rp 25.11 billion, which
helped the unit to end on a record high of Rp 5,400, up Rp 100.

Kim Eng was also seen buying 3.4 million shares in blue-chip
cigarette producer PT HM Sampoerna, worth about Rp 15 billion.
Sampoerna shares ended Rp 125 higher at Rp 4,475.

Hendra said that local investors, which currently owned only
about 20 percent of shares traded, were reluctant to buy blue-
chip shares because they considered their price too high and the
price risk depreciating significantly.

He explained that local investors were now hunting for second-
and third-liners, such as shares in tire company PT Gadjah
Tunggal, heavy equipment company PT United Tractors and spare
parts producer PT Astra Otoparts.

"Foreign investors have brought confidence to local investors,
encouraging them to buy second- and third-line shares, which are
usually inactive. If there are no security problems ahead, I
expect the index to reach 600 soon," he said.

The hectic buying started on Sept. 3, when trading value
jumped to Rp 1.3 trillion from the normal daily range of Rp 300
billion to Rp 400 billion.

This means that the index has jumped 46 percent in dollar
terms since the start of the year.

Eyebox

Ten largest net buyers of shares in Monday's trading

Broker Net value

1. DBS Vickers Securities Rp 111.64 billion
2. CLSA Indonesia Rp 21.42 billion
3. Kim Eng Securities Rp 18.56 billion
4. Lautandhana Securindo Rp 12.56 billion
5. Merrill Lynch Indonesia Rp 10.87 billion
6. Mahakarya Artha Securities Rp 8.53 billion
7. ING Securities Indonesia Rp 8.37 billion
8. ABN Amro Asia Securities Rp 5.87 billion
9. JP Morgan Securities Rp 5.19 billion
10. Quantum Qapita Sekuritas Rp 4.50 billion

Source: Bloomberg