Local shares surge on renewed confidence
JAKARTA (JP): Share prices on the Jakarta Stock Exchange (JSX) surged on Friday on renewed confidence in the country's economy.
The Jakarta Composite Index rose 2.6 percent or 15.13 points to close at 591.63, with shares worth Rp 1.8 trillion changing hands.
Securities analysts attributed the gains to newfound optimism among investors following an improvement in the country's key economic indicators and progress made towards bank restructuring.
They said many investors injected fresh funds into the market to benefit from the improvement in the economic situation.
"Banking restructuring has been completed. Real sector restructuring is in progress. These facts obviously please foreign investors," Herbert J. Liem of PT Asia Kapitalindo Securities said.
He added that declining interest rates had also given extra comfort to investors.
The central bank one-month benchmark interest rate declined from 31.47 percent last week to 29.99 percent on Wednesday.
External factors, Herbert said, also played a role in the bullish conditions on the Jakarta stock market.
He said offshore investors have reentered Indonesia in search of local shares, most of which are currently undervalued.
"Although 90 percent of Indonesian companies are technically bankrupt, they are on the bottom. Their shares could easily rebound," he said.
Joseph Ginting, an analyst from the state owned investment company PT Danareksa, said that profit-taking could be seen in late trading, adding that gainers still outnumbered losers.
Other Asian stock markets ended the week mixed on Friday, with prices falling in Tokyo and Hong Kong but surging in Kuala Lumpur and Taipei.
The Japanese benchmark 225-issue Nikkei Stock Average closed at 16,810.39 points, down 40.86 points, or 0.24 percent from Thursday. On Thursday, the index lost 96.11 points, or 0.57 percent.
Share prices in Hong Kong slumped on Friday after two straight sessions of advances.
The Hang Seng Index, the Hong Kong market's key indicator for blue chips, fell 198.15 points, or 1.5 percent, closing at 12,855.52. On Thursday, the index gained 40.7 points.
The Kuala Lumpur Stock Exchange's Composite Index, which tracks 100 key stocks, rose 4.5 percent, or 33.29 points, to close at 766.82.
In Manila, Philippine shares closed lower on fears of a possible rise in key U.S. interest rates next week, traders said. The 30-company Philippine Stock Exchange Index fell 19.26 points, or 0.8 percent, to 2,502.75.
In Seoul, share prices closed lower on concerns about rising interest rates. The Korea Composite Stock Price Index fell 4.54 points, or 0.6 percent, to 737.83.
In Singapore, share prices closed higher, with the benchmark index gaining on the back of selective buying of index linked stocks. The Straits Times Index rose 14.45 points, or 0.8 percent, to 1,883.28.
In Sydney, Australian share prices closed generally higher, after the country's major banks and other blue-chip industrial stocks helped to boost the market indicator. The All Ordinaries Index rose 25.4 points, or 0.8 percent, to 3,055.0.
In Wellington, New Zealand share prices closed sharply higher, spurred on by broad demand for local blue-chip stocks, brokers said. The benchmark NZSE-40 Capital Index rose 32.17 points or 1.5 percent, to 2,251.32. (udi)