Stock hits another record on rise in bluechips

Stock hits another record on rise in bluechips

Rendi A. Witular, The Jakarta Post, Jakarta

The Jakarta stock index skyrocketed again on Friday to another
record level in the nation's history, lifted by selected banking
bluechips following a successful placement of the government's
minority shares in four privately controlled banks.

The Jakarta Composite Index ended up 5.035 points at 794.467,
with a volume of 10.71 billion shares worth Rp 3.11 trillion
(US$370 million).

Stock analyst Fendi Susiyanto from BNI Securities said the
successful divestment of some of the government's remaining
shares in four banks, coupled with a stable macroeconomic
indicators and a positive outlook, had helped lift the Index
higher.

"The sales have triggered a rally in the stock market since
Thursday, as investors are confident over the solid performance
of the banks," said Fendi.

The government on Thursday sold 7.85 percent in Bank Danamon,
1.48 percent in Bank Central Asia (BCA), 5.65 percent in Bank
Niaga and 1.99 percent in Bank International Indonesia (BII).

According to Fendi, other index movers which took advantage of
the positive sentiment, were Bank Rakyat Indonesia (BRI), the
country's fourth largest bank, state-owned telecommunications
company PT Telkom, and construction company PT Bakrie & Brothers.

BRI ended up by Rp 50 to Rp 1,650, Telkom by Rp 50 to Rp 7,700
and Bakrie by Rp 15 to Rp 90.

Fendi said shares in Bakrie surged suddenly as there was a
rumor the company planned to acquire a 51 percent stakes in gold
and copper miner PT Freeport Indonesia. But Bakrie later denied
the rumor.

Elsewhere, regarding the Index outlook for next week, Fendi
said there was a growing optimism that the index could reach the
psychological level of 800 over a bulk of positive issues, such
on government's plan to start issuing the awaited global treasury
bonds and on earning reports of several companies.

"I expect the Index to trade between 790 and 812 next week,
because there is more positive sentiment than negative," said
Fendi.

He explained that one of the negatives was the anticipation of
the electoral campaign, to begin in March. Many investors fear
that the campaign might turn ugly, as has happened in previous
elections.

Despite its limited direct impact on the country's overall
economy, the rally in the stock market serves as a measure to
gauge investor confidence in the country's economy.

As for companies, the stable and high index figure can be an
effective alternative for raising funds because with the current
surge in the Index, companies planning to sell their shares on
the stock market will obtain higher proceeds.

Elsewhere, the Indonesian rupiah could not get energized from
the surge in the Index, as it ended the day slightly lower
against the U.S. dollar at Rp 8,437 from Rp 8,430 on Thursday, as
the greenback moved higher against other global currencies.