Indonesian shares posted small gains and set a new all-time high on Tuesday, helped by more foreign buying, but other markets in the region were flat to lower because of continuing worries about the global economy. Indonesia's main share index ended up 0.13 percent. Asia's second-best performer this year had earlier gained almost 2 percent to hit a record 3,524.32.
Optimism over the outlook for Southeast Asia's biggest economy has helped lure nearly $1.4 billion of foreign money to Jakarta stocks so far in the third quarter, over three times higher than the previous quarter and the biggest quarterly inflows this year, Thomson Reuters data showed.
"The Indonesian economy is on track to register a solid 6 percent advance in real GNP this year, a pace that should be maintained next year as well," said Bill Witherell, chief global economist at US-based Cumberland Advisors. "The current strength in global commodity prices is a positive factor for this commodity exporter. Indonesia's profit rates are the highest in Asia," he said.
Among the gainers, PT Gudang Garam, Indonesia's largest cigarette maker by volume, rose 2.5 percent, while coal miner PT Bayan Resources gained 5.8 percent, both hitting a record high. Broadly, Asian stocks fell on Tuesday after a report that the Federal Reserve was considering a smaller bond-buying programme than its previous asset purchase scheme.
At 1014 GMT, the MSCI index of Asia-Pacific shares outside Japan had fallen 0.4 percent. Singapore fell 0.5 percent, taking a breather after Monday's climb to 27-month highs. Malaysia lost 0.35 percent, retreating from a 32-month peak last week, and Thailand drifted 0.3 percent lower after hitting a 14-year high earlier. Vietnam, bucking the trend, rose 1.1 percent.
Southeast Asian stocks' rich valuations may have prompted some selling. According to Thomson Reuters StarMine, Indonesia now trades at a 12-month forward price to earnings ratio of 15.5 times compared with 13.2 for all of Asia. It is followed by Malaysia's 14.9, the Philippines' 14.2, Singapore's 14.0, Thailand's 12.5 and Vietnam's 11.7.
The Asian Development Bank said on Tuesday growth across Asia and the Pacific this year would be the fastest since 2007 as the region recovers strongly from the global crisis, but it will slow in 2011. Its forecast growth for the 10 economies of Southeast Asia has been revised up to 7.4 percent in 2010 - the fastest since 1996, before the Asian Financial Crisis - from 5.1 percent, with regional growth in 2011 seen at 5.4 percent.
In Bangkok, banks led gainers, with fourth-largest Siam Commercial Bank rising 2.5 percent and third-ranked Kasikornbank climbing 1.3 percent. In Manila, geothermal power firm Energy Development Corp rose 2.4 percent to a record high.
Foreign investors bought more shares toward the quarter-end, with Bangkok racking up $1.69 billion of foreign buying in the third quarter to Tuesday, almost reversing a net outflow of $1.85 billion in the second quarter at a time of political unrest, Thomson Reuters data showed.
Manila saw net foreign buying of $10.68 million on the day. Among weak spot in the region, shares in Singapore casino operators Genting Singapore and Genting Hong Kong fell 3.5 percent and 9.5 percent respectively after a brokerage said the valuation for Genting Hong Kong looked expensive.
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