Jakarta share prices closed 1.74 percent stronger on Monday, with sentiment boosted by hopes that Bank Indonesia will further cut the BI policy rate at its upcoming board meeting, dealers said.
They said investors targeted rate-sensitive stocks such as banks, autos and property firms, amid expectations that Bank Indonesia would cut its key interest rate cut on Tuesday. The Jakarta Stock Exchange composite index closed up 25.069 points, at 1,469.559 on volume of 1.57 billion shares valued at 1.68 trillion rupiah (184.92 million dollars).
Gainers outnumbered decliners 84 to 42, with 63 stocks unchanged. The rupiah was trading at 9,080/9,085 to the dollar against 9,090/9,095 Friday. "Investors are buying big caps and interest rate-sensitive stocks as they expect that Bank Indonesia (BI) is likely to cut the BI rate tomorrow," Sebastian Tobing, an analyst with Trimegah Securities, said.
Some analysts believe the central bank will err on the side of caution and trim its rate by just 25 basis points after a 50 basis point cut early last month, but Tobing believes the bank may be tempted to go with a 0.5 percentage points cut again. Astra International was up 450 rupiah at 11,950, PGN was up 400 at 13,250 and Indofood was up 10 at 1,210. Telkom rose 250 to 8,100, while rival Indosat rose 75 to 4,625.
Bank Mandiri was up 50 at 2,200, Bank Rakyat Indonesia was up 75 at 4,575, Bank Danamon was up 150 at 5,100 and BCA was up 75 at 4,600. Bank International Indonesia rose 5 to 190 and Bank Permata increased 30 to 790. Property developers Lippo Karawaci rose 10 to 900 and Ciputra Surya also rose 10 to 750.
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