Indonesia's Jakarta Composite Index Extends Winning Streak on Monday
Investors’ appetite for Indonesian stocks, particularly the big cap stocks, made Indonesia’s benchmark stock index (known as the Jakarta Composite Index or IHSG) rise further on Monday (14/04). Most of the sectoral indices were up, led by the property sector and followed by basic industries. Contrary to most Asian indices, which were mixed today (with raw materials in particular being sold by investors), the IHSG managed to climb 1.00 percent to 4,864.88 points.
Despite foreign investors recording a net sell (IDR 4 billion), the slightly stronger rupiah exchange rate (based on the central bank’s midrate) provided a positive market sentiment. Furthermore, higher cement sales in the first quarter of 2014 contributed to positive sentiments resulting in significant gains for cement companies.
The rupiah’s small gain came at the same time as higher gold prices due to increasing geopolitical tensions in Ukraine. Market participants took advantage of the rupiah which had depreciated sharply in recent days after the 2014 parliamentary election result last week. Moreover, a statement from Firmanzah, Special Staff of the President for the Economy and Development, who said that the IHSG and rupiah strengthened because of the country’s improving economic fundamentals, provided ammunition for investors.
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