RI shares end at 6.5 year high on bargain hunting
RI shares end at 6.5 year high on bargain hunting
Dow Jones, Jakarta
Indonesian shares surged sharply on Thursday, ending at a fresh 6.5-year high as investors snapped up stocks after profit taking in the previous two trading sessions, dealers said.
Dealers said they were surprised by the market's strong rebound as they had expected investors to continue taking profit Thursday.
"The sooner-than-expected market rebound underscores the underlying bullish sentiment toward Indonesian stocks, which by large are still relatively cheaper than those in other Asian markets," said a dealer with a foreign brokerage company.
The Jakarta Stock Exchange Composite Index ended up 21.448 points, or 3 percent, at 730.815. This is its highest closing level since July 10, 1997 when the index closed at 729.151, according to JSX data.
Gainers led decliners 118 to 41, with 63 stocks unchanged.
Volume was robust, standing at 3.54 billion shares valued at Rp 1.55 trillion (US$185 million).
Dealers said investors are likely trying to push the index to its all-time high, before they begin to trim their portfolio holdings ahead of the parliamentary elections in April. The index hit an all-time high of 740.833 on July 8, 1997.
Heavyweight stock Telekomunikasi Indonesia rose Rp 250, or 3.4 percent, at Rp 7,500, and its rival Indonesia Satellite Corp, gained Rp 200, or 1.2 percent, at Rp 16,500.
Automotive concern Astra International rose Rp 450, or 8.4 percent, at Rp 5,800 as the launch of new a car model this month is expected to boost its car sales this year.
Indonesia's largest cigarette maker Gudang Garam increased Rp 450, or 3.3 percent at Rp 14,200, and its rival HM Sampoerna edged up Rp 150, or 3.4 percent at Rp 4,600.
Bank Lippo rose Rp 15, or 3.5 percent, at Rp 445 on news that the Indonesian Bank Restructuring Agency has shortlisted a consortium led by Austria's Raiffeisen Zentralbank Oesterreich AG as the single bidder for a 52 percent stake in the bank. The market sees this as good progress in the agency's effort to sell the stake after it failed to attract attractive bids in October.
Dealers expect the strong gains in Thursday's session may encourage other investors to jump into the market to buy shares Friday. However, they aren't ruling out the possibility of profit taking following the gains.
Other Asian markets closed mostly higher on Thursday, with the Tokyo bourse advancing on the back of technology stocks. Japan's Nikkei Stock Average of 225 issues rose 79.83 points, or 0.74 percent, to 10,837.65. The Hang Seng Index rose 45.91 points, or 0.4 percent, to 13,203.59, surpassing the previous 30- month high of 13,157.68 set the day before.
The rupiah ended slightly higher Thursday as foreign players sold the dollar due to its bearishness against most major currencies, dealers said.
The dollar closed at Rp 8,345, down slightly from its close Wednesday at Rp 8,365.
Continued profit-taking against the rupiah after the local currency rose to a five-month high Tuesday drove the dollar to an intraday peak of Rp 8,390 earlier Thursday. But the rise provided a good opportunity for offshore players to build fresh dollar- short positions, dealers said.
Dealers said the dollar's slide was likely also spurred by capital inflows into the local stock market, which staged a 3% rally Thursday to end at 730.815 points. Investors will be swapping their dollars for rupiah to settle those purchases in the coming days.