Local stocks up 6% on foreign fund influx

Local stocks up 6% on foreign fund influx

JAKARTA (JP): Local shares prices rose 6 percent on Monday,
with the main price index breaching the 500 point barrier for the
first time this year on continued foreign liquidity influx into
the market, stockbrokers and analysts said.

The Jakarta Stock Exchange (JSX) Composite Price Index rose
28.61 points to close at 508.14 points, but still off the intra-
day high of 528.54.

Trading volume reached a record high this year of 1.04 billion
shares, valued at Rp 834 billion (US$96 million)

Stockbrokers said foreign players became the prime mover,
buying into large-cap stocks, which drove up the market. Some
secondline stocks, including banking stocks, helped push up the
index.

However, they said, afternoon profit-taking, mostly by local
retail investors, discouraged some investors from jumping in.

The head of research at BNI Securities, Adrian Rusmana, said
the profit-taking was a healthy phenomenon for the local market,
which had experienced a sharp rise during the last few weeks.

"Today's rise was illogical to me. I think the market will
continue to see more profit-taking in the coming days," Adrian
said.

Bahana Securities associate director and head of equity sales
Andre Cita agreed, saying investors were especially concerned
with the bomb blast at the country's largest mosque, the
Istiqlal, on Monday afternoon.

"The blast causes some concern. It gives reasons for people to
take profit," he said.

He noted that while major disturbances in other parts of the
country did not really affect the financial market, "but when it
starts hitting Jakarta, it will create a big problem".

Nevertheless, Cita said foreign investors, especially from the
U.S. and Europe, would continue to eye the Jakarta market for the
longer term.

He noted they would place a large amount of funds in the
market once the political and social situation stabilized,
especially after the June general election.

Domestic telephone operator PT Telkom closed down Rp 125 at Rp
3,575, while international call operator PT Indosat closed up Rp
1,900 at Rp 16,400.

Automaker PT Astra International was down Rp 75 at Rp 1,325,
off a high of 1,550. Cigarettemaker Gudang Garam was up Rp 2,050
at Rp 15,750, and competitor PT HM Sampoerna was up Rp 900 at Rp
11,400.

Asian markets

Other Asian stock markets also surged on Monday, with the key
index in Hong Kong closing at its highest level in almost 18
months.

Bucking the trend was the Tokyo Stock Exchange, where prices
slipped on jitters about earnings prospects of high-technology
companies.

In Hong Kong, the blue-chip Hang Seng Index rose 276.14
points, or 2.2 percent, to 12,766.44, it highest close since Oct.
21, 1997. On Friday, the index had soared 528.07 points, or 4.4
percent.

Brokers said foreign investors were continuing to buy blue
chips on mounting optimism about the economic outlook for Asia.
The index broke through the psychological important 13,000-point
barrier before retreating in the afternoon session on selective
profit-taking.

In Manila, a series of measures implemented by the central
bank to encourage bank lending propelled the main index to its
highest level in 20 months.

The 30-company Philippine Stocks Exchange Index surged 122.34
points, or 5.5 percent, to 2355.98, The index's latest close is
its highest level since it reached 2,300.82 points on Aug. 26,
1997.

In Singapore, share prices closed sharply higher on huge
liquidity inflows, traders said. The Straits Times Index rose 4.1
percent, or 72.39 points, to close at 1,842.31.

In Kuala Lumpur, Malaysian shares closed higher as investors'
sentiment on the region's financial markets turned positive. The
benchmark Composite Index closed at 615.42 points, up 16.01
points, or 2.7 percent.

In Sydney, Australian shares closed higher, with the key index
rising to another all-time high following strong gains in the
resources and media sectors. The All Ordinaries Index rose 13.3
points, or 0.4 percent, to 3113.1, eclipsing the previous all-
time closing high of 3099.8 set Friday.

In Taipei, share prices closed higher, The market's key
Weighted Stock Price Index rose 41.68 points, or 0.5 percent, to
7,623.18.

In Wellington, New Zealand share prices closed higher for the
fourth straight session. The benchmark NZSE-40 Capital Index rose
7.03 points, or 0.3 percent, to 2,212.81.

In Bangkok, Thai share prices closed higher as foreign cash
continued to buoy the market despite signs of some profit-taking.

The SET index rose 9.65 points, or 2.4 percent, to 412.19.
(rid).