JCI at Record Close, Rupiah at 40-Month High After G-20 Meeting

October 25, 2010
After two weeks of consolidation, the Jakarta Composite Index jumped 45.75 points, or 1.3 percent, to close at 3,643.49. (Antara Photo) After two weeks of consolidation, the Jakarta Composite Index jumped 45.75 points, or 1.3 percent, to close at 3,643.49. (Antara Photo)

Jakarta. Indonesia’s benchmark stock index closed at a record high on Monday, and the rupiah hits its strongest level in more than three years, following the Group of 20 meeting in South Korea.

After two weeks of consolidation, the Jakarta Composite Index jumped 45.75 points, or 1.3 percent, to close at 3,643.49. About 5.9 billion shares worth Rp 5.1 trillion ($571.6 million) changed hands. Gainers outnumbered decliners 135 to 78.

Fauzi Ichsan, of Standard Chartered Bank, said investors were encouraged by the efforts of G-20 members to avoid a currency and trade war.

He said the JCI was projected to reach 3,800 by the end of the year, and perhaps climb to 4,500 next year.

Meanwhile, the rupiah traded at 8,896 versus the US dollar as of Monday night, its strongest level since June 2007, on optimism that Bank Indonesia will tolerate further appreciation after the G-20 members pledged to avoid weakening their currencies to support growth.

The currency has gained 5.2 percent this year.

Member countries of the G-20, including Indonesia, agreed to refrain from “competitive devaluation” and let markets set foreign-exchange values at a weekend meeting in Seoul.

“The rupiah gained as a result of the G-20 outcome,” said Enrico Tanuwidjaja, an economist at OSK-DMG Group in Singapore.

“That suggests this currency war concern should not be over-emphasized and competitive devaluation will not be desirable.”

On the stock exchange, Astra Agro Lestari, Indonesia’s biggest plantation stock, rose 6.2 percent to Rp 25,800.

It was its highest close since July 2008, as palm oil for January advanced to the highest level in 27 months, rising 2.5 percent to 3,079 ringgit ($996) a metric ton on the Malaysia Derivatives Exchange.

Bakrie Sumatera Plantations rose 2.5 percent.

Thomas Arifin, treasury director of Bank Mandiri, said the company had agreed to take over the Domba Mas Group’s debt owed to Bank Mandiri.

Bank Danamon Indonesia, owned by Singapore Temasek Holdings and Deutsche Bank, advanced 6.4 percent to Rp 6,700, the highest since November 2007.

Danamon was upgraded to “buy” from “neutral” by UBS’s Joshua Tanja, who cited stronger-than-expected loan growth.

Petrosea, an engineering construction and mining services company, rose 3.8 percent to Rp 41,500.

The company said it would provide mining services to Kideco Jaya Agung under a five-year contract worth $200 million. 


Bloomberg & JG

http://www.thejakartaglobe.com/business/jci-at-record-close-rupiah-at-40-month-high-after-g-20-meeting/403209