Jakarta shares jump

Jakarta share prices finished 1.5 percent higher on Monday for a fourth trading day as investors continued to build up positions following recent sell-offs, with Wall Street's rise Friday providing a further boost to sentiment, dealers said.
The main index has now gained by a cumulative 14 percent since the US Federal Reserve cut its discount rate by a half percentage point to 5.75 percent on August 18. The Jakarta Stock Exchange composite index closed up 32.24 points at 2,175.35 on volume of 5.4 billion shares worthh 4.3 trillion rupiah (457.93 million dollars).
Gainers led losers 147 to 59, while 47 stocks were unchanged. The rupiah was trading at 9,380/9,390 to the US dollar, down 0.3 percent from its levels late Friday.
"The market has consistently bounced back since the Fed cut its discount rate. Going forward, the question is whether or not the Fed will also cut the overnight fed funds rate at a similar pace," Ciptadana fund manager Andreas Yesakasih said. He said a rate cut by the Fed would widen the spread between US and local interest rates and therefore would prevent at least any further exit of foreign funds from Indonesian stocks.
Despite recent strong fund inflows, he said the main index was still far below its all-time high of 2,401 points, which makes the market still attractive. He said many big caps including Telkom, Perusahaan Gas Negara (PGN), Astra International and banking stocks were still trading below their fair prices.
Yesakasih, however, said he does not expect the main index to revisit the record level soon mainly because some short-term traders and retail investors are likely to opt to take profits at some point.
Index heavyweight Telkom gained 100 rupiah or 0.9 percent to 10,950 and Astra International rose 350 rupiah or 2 percent to 17,650. Among other key gainers, Bank Mandiri rose 125 rupiah or 4.1 percent to 3,150, Bank Negara Indonesia added 150 rupiah or 7 percent to 1,990, and Bank Rakyat Indonesia rose 150 rupiah or 2.5 percent to 6,100.
Among the losers, Bakrie Sumatra fell 90 rupiah or 6 percent to 1,410 as investors negatively reacted to the company's decision to cut the price of its proposed rights issue to 1,100 rupiah per share from 1,600 under the earlier plan.