T

he stock market index has set five new record highs so far this year, with analysts saying that the streak is expected to continue for weeks as domestic and global updates spur positive sentiment and growth in the country'€™s bourse.

The Jakarta Composite Index (JCI) '€” the main price barometer at the Indonesia Stock Exchange (IDX) '€” extended its gains when it rose 0.6 percent to hit a new all-time high at 5,427 on Friday'€™s early trading season, and wrapped up the day'€™s trading at 5,400, a new closing record.

Alfred Nainggolan from Koneksi Kapital said he expected that the stock market would continue to record new highs this week, bearing in mind that positive domestic corporate-earning results would be announced, a lower benchmark interest rate is expected to spur economic growth and further good news is expected from the global economy.

'€œThe index might hit a new record high at round 5,500 this week [...] We think that this record streak will continue for weeks onward, possibly into the second quarter,'€ Alfred said.

'€œPublicly listed firms will start announcing their yearly targets and giving away dividends in March,'€ he added.

Recent financial results and the country'€™s latest trade account data indicated positive economic growth to come this year, Alfred went on.

He added that policies introduced by the new government to cut red tape for investment permits and slash ballooning fuel subsidies from the state budget to be channeled to more productive sectors, as well as a recent interest rate cut, might lead to listed companies booking an average of 15 to 18 percent rise in net profits by year-end.

Lucky Bayu Purnomo, a senior analyst from LBP Enterprise, agreed that the index might continue to make records few weeks ahead but warned that there was a possibility for correction in March with the JCI having grown so high so far this year.

'€œWe think that this record streak will continue for weeks onward, possibly into the second quarter.'€

'€œ[The future growth] is down to the new government'€™s commitment to the country'€™s economic growth and Bank Indonesia'€™s [BI] move to lower interest rates,'€ he said.

The central bank announced a cut in the benchmark BI rate, an influential monetary tool that acts as a yardstick for lending and deposits in the economy, by 25 basis points to 7.5 percent on Tuesday, to make room for a loosening of monetary policy to spur economic growth.

Globally, the risk that Greece will exit the eurozone has subsided after the country struck a deal with its European and international creditors to extend current bailout programs. Meanwhile, the European Central Bank'€™s quantitative easing program is expected to boost liquidity in the global market.

'€œThis might lead to further foreign net buys,'€ Alfred said.

Foreign investors have bought Rp 7.44 trillion stocks more than they have sold so far this year up to Friday, helping the JCI to grow by 3.31 percent year-to-date, the third highest growth in Southeast Asia after the Philippines'€™ PSE Index and Thailand'€™s SET Index.

The index has risen by 2.09 percent month-to-date, reporting the highest monthly growth in the region.

With worries about Greece put on the backburner, traders next week could focus on the slew of expected economic data, including several reports on the housing market, consumer confidence, the consumer price index and the preliminary fourth-quarter reading on gross domestic product, Reuters reported.

The data will give investors fuel to speculate on the timing and speed of an interest rate hike by the US Federal Reserve.