Indonesian stocks hit a new record on Friday and outperformed the region for the week following the nomination of new central bank governor and low rate outlook amid economic optimism across Southeast Asia. Indonesia's parliament approved the appointment of Darmin Nasution as central bank governor on Thursday, as expected, a move seen as positive for the country's reform drive and for bonds, stocks and the currency.
The Jakarta main share index finished up 1.07 percent at 3,042.02, at one point hitting 3,051.37, topping the record of 3,019.01, set on the previous day. Its gain for the week rose to 1.66 percent and the bourse was Southeast Asia's best performer.
On technical charts, the outlook for the Jakarta stock index appeared to be brightening, according to John Teja, a director at Ciptadana Securities in Indonesian capital, who pegged the next index target at 3,200 for a short-term uptrend. Resource shares led gains in Jakarta, with International Nickel Indonesia surging 7.7 percent and palm plantation firm Astra Agro Lestari rising 5.2 percent.
The credit growth optimism also pushed up bank shares, with the third biggest lender, Bank Central Asia, rising 0.8 percent and state lender Bank Mandiri up 1.7 percent. Singapore rose 0.6 percent to its highest in almost three months, Malaysia gained 0.7 percent, hovering around 10-week highs and Thailand closed up 0.87 percent at 26-month highs. The Philippines and Vietnam each finished the session nearly flat and posted losses for the week, bucking the trend of the major markets. In Bangkok, the Bank of Thailand's upward revision to 2010 GDP added to the broader optimism surrounding the economy. The Thai index gained 1.53 percent for the week, the second best after Indonesia.
Daily market volume in Bangkok remained healthy of 38.8 billion baht after it rose to a 9-month high of 42.8 billion baht on Thursday. Foreign investors bought a net 2.83 billion baht of Thai shares on Friday after a net selling a day earlier. Thailand's bank subindex rose 1.4 percent amid expectations the sector would benefit from the economic recovery and interest rate rises.