After the week-long holiday Indonesian stocks made an impressive return on Monday (03/07). Indonesia's benchmark Jakarta Composite Index surged 1.38 percent to 5,910.24 points, another record high position, led by financial and telecommunication stocks. Investors were in the mood to buy Indonesian shares after the long holiday. Moreover, positive Chinese economic data and Indonesia's easing core inflation provided more reasons for investor appetite.
A new survey indicated that China's manufacturing activity turned back into expansion-mode in June 2017 (from contraction in the preceding month). In fact, manufacturing activity in China expanded at the fastest pace in three months. This somewhat eases market participants' concern about the Chinese economy and therefore supported the performance of stocks across the Asian continent on Monday.
Meanwhile, Indonesia's core inflation (which excludes administered and volatile food prices) eased to 3.13 percent year-on-year (y/y) in June 2017, from 3.20 percent (y/y) in May. Headline inflation, however, slightly rose to 4.37 percent (y/y) in June, from 4.33 percent (y/y) in the preceding month. The latter remains high due to the government's electricity tariff reforms.
Telekomunikasi Indonesia (Telkom), the leading telecommunication company in Indonesia, saw its shares rise 5.97 percent to IDR 4,790 a piece. Telkom is also listed on the New York Stock Exchange (NYSE). Its NYSE stocks were upgraded by the Goldman Sachs Group Inc from a buy rating to a conviction-buy rating last week. Meanwhile, its NYSE stocks were also upgraded by BidaskClub from a hold rating to a buy rating in late June.
Other blue chip stocks in Indonesia that experienced a great performance today were Perusahaan Gas Negara (+4.44 percent), Bank Mandiri (+5.88 percent) and United Tractors (+5.10 percent). Foreign investors recorded net buying of IDR 477 billion (approx. USD $36 million) on Monday (03/07).
Remarkably, shares of Astra International, which is known as the benchmark of the Indonesian company due to the presence of its subsidiaries in basically all sectors of the economy, fell 1.68 percent to IDR 8,775 a piece.
Jakarta Composite Index - JKSE:
The mining sector was also in demand today. Coal mining company Bumi Resources, which is often troubled by debt issues, saw its shares rise 10.00 percent, while coal miner Adaro Energy rose +3.16 percent.
Meanwhile, the Indonesian rupiah depreciated 0.15 percent to IDR 13,368 per US dollar (Bloomberg Dollar Index). Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.04 percent to IDR 13,325 per US dollar.
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia