Asean Exchanges, a platform of seven Association of Southeast Asian Nations-based bourses, will strengthen cross-border collaboration, as the region wants to promote the growth of its capital markets, top executives said in a joint statement on Friday (03/03). (ID Photo/David Gita Roza)

JCI Continues Rebound Amid Bargain Hunt, Low Inflation Hope


DECEMBER 29, 2016

Jakarta. Indonesia's benchmark stock index gained for second consecutive day on Wednesday (28/12) as investors picked up shares at bargain price with the economy showing signs of resilience amid capital outflow concern.

The Jakarta Composite Index closed 2.08 percent higher at 5,209.44, the bourse's biggest daily gain in one-and-a-half months, following Tuesday's 1.5 percent surge.

Foreign investors accounting for 26 percent of the total trade on the day, bought Rp 682.9 billion ($50.6 million) more in shares than they sold. This was offset by domestic investors who sold Rp 683 billion more in shares than they bought.

Indonesian cigarette producer HM Sampoerna saw its price surged 3.42 percent, closing to 3,930.

"We expect JCI to continue strengthening today as stocks are becoming cheaper amidst capital outflow from the [US President-elect Donald] Trump effect," Trimegah said in a note.

Reliance Securities Analyst Lanjar Nafi said investors were bullish after Bank Indonesia senior deputy governor Mirza Adityaswara reportedly said Indonesia's inflation reading in December was at 0.2 percent month on month that could push down down the annual inflation rate below 3 percent.

"It showed that Indonesia's economic condition is still strong and resilience," added Lanjar.

Indonesia's annual inflation rate rose to 3.58 percent in November from 3.31 percent in October this year.

The rupiah weakened to 13,447 against the US dollar on Wednesday compared to 13,436 on Tuesday, according to data from Bank Indonesia.

Philippine stocks rose nearly 2 percent, posting their biggest intraday percentage gain in nearly three weeks.

"Given the fact that Indonesia and Philippines and most of the commodity-related economies were heavily hurt during the recent selloff, I think it makes sense for investors to buy back those shares given that the fruits are hanging low now," said Taye Shim, research head at KDB Daewoo Indonesia.

Foreign investors, who had been net sellers of Indonesian stocks since the US election, have become net buyers for the past several sessions.

Malaysian stocks posted their biggest intraday percentage rise in two weeks, climbing as much as 0.5 percent, while Singapore added 0.3 percent in its second straight session of gains. Bucking the trend, Vietnam shares fell marginally.

With additional reporting from Reuters