RI market steady on positive sentiment
JAKARTA (JP): The Indonesian financial market closed the week higher yesterday on positive sentiment over the economic outlook with international donors pledging more aid for the country.
The rupiah maintained its strength, closing at 13,350 against the U.S. dollar on the Jakarta spot market, while share prices on the Jakarta Stock Exchange (JSX) gained 2.6 percent, dealers and stockbrokers said.
Analysts said the euphoria over the International Monetary Fund's pledge of a further US$6 billion in aid in addition to the imminent release of $1 billion to the country had buoyed the markets yesterday.
"The market has received the new IMF package gleefully," Bahana Securities associate director and head of equity sales Andre Cita said.
"I'm very pleased with what has happened in the market, especially the series of good bits of news which have come in. That's encouraging," he added.
After strengthening 7 percent on Thursday, the rupiah remained steady against the U.S. dollar yesterday in a thin market as operators took a break ahead of the weekend.
The announcement of new loans from the IMF and the World Bank, and the rescheduling of Indonesian sovereign debt at one stage lifted the rupiah to Rp 12,800 on Thursday, but profit taking later sent it back above Rp 13,000.
Yesterday the rupiah was trading at 13,100 in the morning, but inched down in the afternoon to close at 13,300/400, dealers said.
They said state banks were continuing to stand behind the rupiah by selling their dollar holdings.
The strong rupiah and positive sentiment boosted share trading on the local bourse, stockbrokers said.
The JSX Composite Index closed 12.462 points higher at 486.234. Trading turnover totaled 570.46 million shares valued at Rp 551.49 billion (US$41.3 million).
Stockbrokers said domestic investors dominated trading as they scrambled to gain from the good news coming into Indonesia. They said that foreign investors had continued to remain on the sidelines, despite the positive sentiment.
Cita agreed and said foreign investors were waiting for the government to move to revive the economy and ensure social stability.
"We did not see as much foreign buying as we would like to. A lot of foreign investors I spoke to are waiting to see if the economy is not just going to stabilize but actually begin to move forwards again."
"They also want to make certain that the social situation will remain stable."
Socgen-Crosby Indonesia's head of research Goei Siauw Hong noted that domestic investors were still hunting out state-owned stocks and stocks plagued by rumors.
"Our market is more rumor-driven now. Investors do not look into the fundamentals of the companies they invest in," Hong said.
He said domestic investors had continued to focus their buying on companies that were part of the government's privatization program, with state mining company PT Aneka Tambang gaining Rp 75 to close at Rp 2,475 on 17.4 million shares traded.
However, profit-taking hit food giant PT Indofood Sukses Makmur, which had earlier made huge gains on rumors that a foreign investor would acquire a stake in the company.
Indofood shed Rp 150 to close at Rp 2,175 on 62 million shares traded, topping the list of the most actively traded stocks.
Banking stocks also extended their gains as local investors scrambled to buy shares in banks considered to be healthy.
Bank Negara Indonesia gained Rp 50 to close at Rp 425 on 14.1 million shares traded, Lippo Bank gained Rp 75 to close at Rp 950 on 35 million shares, and Bank Internasional Indonesia rose Rp 25 to close at Rp 400.
Heavyweight state telephone monopoly PT Telkom climbed Rp 125 to close at Rp 4,625, while state satellite operator PT Indosat surged Rp 1,700 to finish the day on Rp 16,200. (rid)