JCI Hits All-Time High, SE Asia Stocks Largely Firm

Indonesia's benchmark stock index broke a record on Wednesday (25/10), closing at an all-time high. (Antara Photo/Akbar Nugroho Gumay)

By : Devika Syamnath, Sarah Yuniarni | on 8:08 PM October 25, 2017
Category : Business, Markets, Featured

Jakarta. Indonesia's benchmark stock index broke a record on Wednesday (25/10), closing at an all-time high, gaining for four days straight, due to a positive balance sheet projection of blue-chip companies and the country's stable economic growth.

The Jakarta Composite Index (JCI) closed 1.23 percent higher, at 6,025. Its previous record high 5,952 on Tuesday.

Earlier, President Joko "Jokowi" Widodo said "it would be great" if JCI could reach above 6,000 this year.

"It shows the government is able to maintain inclusive and sustainable macroeconomic fundamentals," said Nafan Aji, analyst at brokerage firm Binaartha Sekuritas.

Kiswoyo Adi Joe, analyst at Recapital Securities said stable economic growth is seen from September's low inflation rate that stood at 3.72 percent, compared with 3.82 percent in August.

He also said investors are optimistic about the soon-to-be-published financial report of LQ45 companies — 45 stocks with the biggest market capitalization in the country — especially those in the financial and consumer goods sectors.

Foreign investors made up 38 percent of Wednesday's trading, buying Rp 130.41 billion ($9.60 million) more in shares than they sold, while local investors sold Rp 130.00 billion more in shares than they bought.

Although foreign investors have posted a total net sell of Rp 1.78 trillion since January this year, the JCI still gained 13.38 percent.

"Despite the net sell, the JCI still hit its record high. That means domestic investors are now beginning to dominate the local market," said Kiswoyo.

He was not optimistic, however, about the JCI maintaining the 6,000 level till the end of the year.

"I believe there will be profit taking and the JCI can drop in the near future. It will reach 5,800 around the end of the year," he said.

All indexes — except infrastructure, transportation and utility — rose during Wednesday's trading. The increase was led by a 3.14 percent gain in the index that tracks 68 companies in the basic industry and chemicals sectors.

The index that tracks 131 companies in the trade, services and investment sectors also gained 2.34 percent.

Mining contractor United Tractors was the biggest boost, jumping 8.4 percent, while state-owned lender Bank Mandiri surged 2.56 percent.

Gainers beat decliners by 206 to 136.

Southeast Asian Market Largely Firm

Southeast Asian stock markets were largely firm on Wednesday, as investors took heart from the Dow scaling a record closing high, and as oil prices spiked overnight after top exporter Saudi Arabia said it was determined to end a supply glut.

The Dow Jones Industrial Average rallied on Tuesday, registering its biggest daily percentage gain in more than a month, as stronger-than-expected results and forecasts from companies such as 3M and Caterpillar fueled optimism.

Oil prices on Wednesday hovered near a four-week high hit a day earlier, after Saudi Arabia's energy minister said the focus remained on reducing oil stocks in industrialized countries to their five-year average, and raised the prospect of prolonged output restraint once an OPEC-led supply-cutting pact ends.

The Organization of the Petroleum Exporting Countries plus Russia and nine other producers have cut oil output by about 1.8 million barrels per day since January.

The pact runs to March 2018, but they are considering extending it.

Thai shares extended gains into a third session, buoyed by industrial, energy and financial stocks.

Oil and gas company PTT PCL led the gains with a rise of up to 1.5 percent, while real estate developer U City PCL gained 50 percent.

The International Energy Agency said on Tuesday that Southeast Asia's overall energy demand is expected to climb nearly 60 percent by 2040 from now, and that the region is expected to add more than 565 gigawatts of power-generation capacity in the period.

Additional reporting by Reuters

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