www.thejakartaglobe.com - Indonesia’s benchmark stock index closed at an all-time high on Tuesday, boosted by Bank Danamon Indonesia’s shares, which resumed trading following a record buyout offer from Singapore’s DBS Group.
The Jakarta Composite Index gained 49.37 points, or 1.2 percent, to 4,215.44. That eclipsed the last record closing high, set on Aug. 1 at 4,193.44.
The stock measure’s biggest gainer was Danamon, up 39 percent at Rp 6,400, its highest close since March 23, 2011. DBS is set to acquire all of Danamon in one of Indonesia’s biggest takeover deals. Danamon was suspended from trading on Monday. (source)
The finance sector gained 3 percent on Tuesday and accounted for almost two-thirds of the JCI’s advance, Bloomberg data showed.
Bank Mandiri, the nation’s biggest bank by assets, rose 2.2 percent to Rp 7,100, while Bank Negara Indonesia, the fourth-largest lender, rose 2.5 percent to Rp 4,150.
Shares also gained on expectations inflation won’t accelerate, now that concerns of the subsidized fuel price increasing have eased. That might suggest the central bank is likely to keep its key interest rate at a record low of 5.75 percent when policy makers next meet on April 12. Low borrowing costs would encourage consumers to take out loans for purchases on homes and cars.
Astra International, the biggest auto distributor in Indonesia, rose 2.4 percent to Rp 77,000.
“Looking at inflation up to March and after the fuel decision, I believe Indonesia can maintain inflation this year close to the inflation number last year,” said Janson Nasrial, from AmCapital Indonesia.
Inflation last year was 3.79 percent, below the central bank’s low-end target of 4 percent but had accelerated to 3.97 percent in March.
Janson expects the JCI to reach 4,400 to 4,500 by the end of the year on the back of low inflation and robust corporate earnings growth.
The JCI gained for the sixth consecutive trading day on Tuesday, putting its advance at 4.6 percent for the period. About 5.1 billion shares valued at Rp 7.14 trillion ($785 million) traded on the Indonesia Stock Exchange. Foreign investors bought Rp 1.23 trillion more in shares than they sold, almost seven times this year’s daily average turnover.
Stocks began their retreat in August as Greece’s debt woes threatened to plunge the euro zone into a financial crisis and the United States lost its top credit rating from Standard & Poor’s. During October, the JCI at one point fell 22 percent from its record high, which put stocks into a technical bear market.
Across the region and around the world main stock measures have been posting record highs or been at their highest in recent years. The Philippine Stock Exchange Index set an all-time high on March 16 at 5,145.89.
In the United States, the Standard & Poor’s 500 index closed Monday’s trading at the highest since May 2008.
Source: http://www.thejakartaglobe.com/business/danamon-takeover-lifts-indonesias-jci-to-all-time-high/509074 - April 3, 2012
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