MARKET DEVELOPMENT
Stocks Continue Record Streak as Investors Buy More
Stocks Continue Record Streak as Investors Buy More
11/02/2015 (Jakarta Post) - The stock market hit new records in a two-day streak on Monday, as there was a selective buying of stocks and as foreign investors bought more shares than they sold in the earnings season.
Jakarta Composite Index (JCI) — the main price barometer in the Indonesia — recorded a new all-time high during the day’s early trading session at 5,375, up from 5,342.5 on Friday, which was also a record high then.
European Central Bank’s (ECB) asset purchase and Indonesia’s improving fundamentals as well as speculations of a benchmark interest rate cut were behind the buying mood, according to analysts.
Foreign funds bought a net Rp 365.4 billion in stocks on Monday, bringing up the overall net buy so far this year to Rp 3.07 trillion, stock exchange data shows.
Universal Broker head of research Satrio Utomo said foreign net purchases had pushed up the index as investors laid hopes on the country’s economic growth after recent data from the Central Statistics Agency (BPS) showed improvement in the country’s exports.
“The [trade] surplus indicates that Indonesian growth is actually not that bad and with increasing liquidity in the Europe, the country is quite attractive as an investment destination,” he said.
Indonesia’s trade balance began to turn into a US$186.8 million surplus in December last year, although overall balance for 2014 remained in a $1.89 billion deficit as non-oil and gas export growth could not offset a surge in oil imports.
Ten sub indexes in the country’s stock market recorded mixed results on Monday’s trading.
Finance stocks made the highest growth with 1 percent while agriculture stocks slumped by 2.3 percent after big gains on the previous day of trading backed by the government’s biodiesel push that will up demands for palm oil, the raw material for biofuel.
Shares of the country’s three largest banks, Bank Mandiri, Bank Central Asia (BCA), and Bank Negara Indonesia (BNI), were among the day’s top daily movers. Bank Mandiri surged 3.1 percent, with the bank due to report full-year 2014 earnings later in the week.
Expectations of an interest rate cut supported the prospect for earnings growth, a broker said. Companies are slated to announce their full-year 2014 corporate earnings results this month.
Markets are speculating about an interest rate cut by Bank Indonesia in its policy rate meeting next week, said Jakarta-based Samuel Sekuritas Indonesia in a research note.
“An interest rate cut would be positive for many sectors,” said Samuel analyst Muhamad Alfatih, as quoted by Reuters.
ECB’s ongoing quantitative easing program, designed to pump hundreds of billions of euros into the sagging eurozone economy, had also steamed capital into the country’s high growth bourse.
“There high liquidity flowing from Europe following stimulus from ECB. Also note that China’s slowdown has also made Indonesia an attractive market for investments,” market analyst from Millenium Danatama, Demon Silitonga said.
Data published on Sunday showed China’s trade performance slumped in January, with exports falling 3.3 percent from the levels one year ago, while imports tumbled 19.9 percent, far worse than analysts had expected amidst slowing economic growth.
The JCI has gained 2.32 percent so far this year after a 21.15 percent gain throughout last year.
Indonesia and the Philippines were the only two Southeast Asian indexes that ended in the black on Monday, while China also experienced daily growth in contrast with mostly red Asian indexes.
The MSCI’s broadest index of Asia-Pacific shares slipped.
Jakarta Composite Index (JCI) — the main price barometer in the Indonesia — recorded a new all-time high during the day’s early trading session at 5,375, up from 5,342.5 on Friday, which was also a record high then.
European Central Bank’s (ECB) asset purchase and Indonesia’s improving fundamentals as well as speculations of a benchmark interest rate cut were behind the buying mood, according to analysts.
Foreign funds bought a net Rp 365.4 billion in stocks on Monday, bringing up the overall net buy so far this year to Rp 3.07 trillion, stock exchange data shows.
Universal Broker head of research Satrio Utomo said foreign net purchases had pushed up the index as investors laid hopes on the country’s economic growth after recent data from the Central Statistics Agency (BPS) showed improvement in the country’s exports.
“The [trade] surplus indicates that Indonesian growth is actually not that bad and with increasing liquidity in the Europe, the country is quite attractive as an investment destination,” he said.
Indonesia’s trade balance began to turn into a US$186.8 million surplus in December last year, although overall balance for 2014 remained in a $1.89 billion deficit as non-oil and gas export growth could not offset a surge in oil imports.
Ten sub indexes in the country’s stock market recorded mixed results on Monday’s trading.
Finance stocks made the highest growth with 1 percent while agriculture stocks slumped by 2.3 percent after big gains on the previous day of trading backed by the government’s biodiesel push that will up demands for palm oil, the raw material for biofuel.
Shares of the country’s three largest banks, Bank Mandiri, Bank Central Asia (BCA), and Bank Negara Indonesia (BNI), were among the day’s top daily movers. Bank Mandiri surged 3.1 percent, with the bank due to report full-year 2014 earnings later in the week.
Expectations of an interest rate cut supported the prospect for earnings growth, a broker said. Companies are slated to announce their full-year 2014 corporate earnings results this month.
Markets are speculating about an interest rate cut by Bank Indonesia in its policy rate meeting next week, said Jakarta-based Samuel Sekuritas Indonesia in a research note.
“An interest rate cut would be positive for many sectors,” said Samuel analyst Muhamad Alfatih, as quoted by Reuters.
ECB’s ongoing quantitative easing program, designed to pump hundreds of billions of euros into the sagging eurozone economy, had also steamed capital into the country’s high growth bourse.
“There high liquidity flowing from Europe following stimulus from ECB. Also note that China’s slowdown has also made Indonesia an attractive market for investments,” market analyst from Millenium Danatama, Demon Silitonga said.
Data published on Sunday showed China’s trade performance slumped in January, with exports falling 3.3 percent from the levels one year ago, while imports tumbled 19.9 percent, far worse than analysts had expected amidst slowing economic growth.
The JCI has gained 2.32 percent so far this year after a 21.15 percent gain throughout last year.
Indonesia and the Philippines were the only two Southeast Asian indexes that ended in the black on Monday, while China also experienced daily growth in contrast with mostly red Asian indexes.
The MSCI’s broadest index of Asia-Pacific shares slipped.