Jakarta share prices closed 1.68 percent higher on Monday at a fresh record high on hopes that the central bank will soon cut its key interest rate, dealers said.
Bank Indonesia will hold its monthly board meeting Tuesday, at which it will decide the direction of its reference rate, known as the BI rate.
The Jakarta Stock Exchange composite index closed up 24.865 points at 1,507.926 with 2.58 billion shares traded worth 2.64 trillion rupiah (302.06 million dollars). Advancers led decliners 93 to 45, with 78 stocks unchanged.
The rupiah was firmer at 8,735/8,740 to the dollar compared to Friday's level of 8,782/8,787.
"One of the main reasons (for the market's rise) is the expectation that the central bank might start to cut its interest rate," said UOB Kay Hian Securities head of research David Chang.
The central bank has left the rate unchanged at 12.75 percent since last December. The BI rate was introduced in July to guide the direction of the one-month Bank Indonesia Certificate (SBI) rate and it has never been cut before.
Chang said foreign buyers targeted mostly blue chips.
He said the market has turned expensive compared to regional peers such as Thailand, and hence profit-taking may set in soon.
Among major stocks, Telkom was up 250 rupiah at 7,800 while its peer Indosat gained 50 at 5,500.
State-owned Bank Mandiri added 100 to 2,325, Bank Rakyat Indonesia was up 125 at 4,400 and Bank Central Asia was up 75 at 4,425.
Car dealer Astra International gained 250 at 11,750 and state gas distributor Perusahaan Gas Negara jumped 200 to 13,850.
Cement maker Semen Gresik added 2,600 to close at 27,100 after reporting last Friday a first-quarter to March net profit of 287.27 billion rupiah, up from 115.41 billion over the same period last year.
The stock fell sharply last Thursday after news that Mexico's Cemex was selling most of its stake in the company.
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