JSX share prices surge on improved foreign sentiment
JSX share prices surge on improved foreign sentiment
JAKARTA (JP): Shares on the Jakarta Stock Exchange (JSX)
soared again on Tuesday on the continued influx of foreign funds
and improving confidence in the recovery of the country's
beleaguered economy.
The Jakarta Composite Index -- the main gauge of local stock
prices -- rose 4.75 percent, or 24.88 points, to close at 548.24
-- a 15-month high.
The index rose 5.7 percent on Monday.
Stockbrokers and analysts are optimistic that the index will
continue its upward movement until mid May.
An institutional sales broker at Trimegah Securindolestari,
Vonny Juwono, said the rally on the JSX could be partly
attributed to the brighter prospects of the corporate debt
restructuring driven by rupiah appreciation against the greenback
and lower interest rates.
"The JSX should look firmer, with its listed companies having
an easier time completing their restructuring process with
creditors," Vonny said.
Some big listed firms have proceeded with their massive debt
restructuring plans. They include auto giant PT Astra
International, conglomerate PT Bakrie & Brothers and state owned
PT Danareksa.
Vonny also added that a cheaper dollar meant a lighter burden
for companies listed on the JSX to service their foreign currency
debts.
Bahana Securities associate director and head of institutional
equity sales, Andre Cita, added that foreign investors brought in
new funds because they had seen better indicators of recovery in
the Indonesia economy.
The fact that the country's political situation prior to the
June 7 elections has not deteriorated further as previously
expected has helped boost investors' confidence, Cita said.
In addition, he said, investors are also motivated by the
moderating inflation rate, the downward movement of interest
rates and the improving gross domestic product.
"A number of foreign investors, however, missed the rally," he
said.
He predicted that the main price index would continue to rise
and test the 600 point level in the short term.
When the influx of foreign funds continued, Cita said, it then
pushed the rupiah toward the government-targeted level of Rp
7,500 against the U.S. dollar.
A strong rupiah gives confidence to investors in Indonesia's
economy, which in turn positively induces the stock market.
Meanwhile, a foreign exchange dealer at a local private bank
said the rupiah opened strong, below the 8,000 level against the
dollar, but then weakened in the afternoon to close at Rp 8,085.
"I would guess the rupiah's weakening was due to profit-taking
by investors who had bought rupiah at Rp 8,400 per dollar," he
said.
On the JSX, banking stocks were mostly higher, led by Bank
Bali which gained Rp 275 to close at Rp 875 on 52 million shares
traded.
Bank Bali was suspended at midday after rising 46 percent.
The Indonesian government approved the U.K-based Standard
Chartered Bank PLC last month to purchase shares of Bank Bali by
injecting US$56 million to help in the bank's recapitalization.
Most large-cap stocks also booked big gains, with heavyweight
state domestic telecommunications firm PT Telkom rising Rp 200 to
close at Rp 3,900.
Astra International jumped Rp 575 or 26 percent to close at Rp
2,150 and International call operator PT Indosat rose Rp 1,050 to
close at Rp 17,150. (udi)