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).