T

he Indonesian Stock Exchange (IDX) extended its price rally Friday, pushing up the main composite index to another new record high despite declines in the world’s major markets.

The Jakarta Composite Index (JCI) gained 0.39 percent to close at a new high of 3,117 in active trading. The price index breached the 3,100 mark on Thursday after weeks of hovering below the psychological barrier.

The rupiah also appreciated 0.1 percent to 8,973 per US dollar as of 4:21 p.m. in Jakarta on Friday from a week ago.

It reached 8,905 on Aug. 3, its strongest level since June 2007, and is Asia’s third-best performing currency outside Japan this year, having climbed 4.7 percent.

Valbury Asia Futures vice president of research and analysis Nico Omer Jonckheerem told The Ja-
karta Post that the local mar-ket’s resistance to the selling pressure in other major markets was an indication of strong investor confidence in the country’s economy.

“Indonesia is home of one of the most promising stock markets in the world for the next 10 years. Therefore, the Indonesian stock market could gain more than the others,” Nico said, but added that he did not eliminate the possibility of corrections if a global recession strikes again.

Nico and other analysts share the confidence that the price index could exceed 3,200 by year-end.

Securities Indonesia head of research Alex Wreksoremboko acknowledged that there were concerns that share prices in the Indonesian market were too high. “However, the surge in trading activity and rise in prices in recent days indicates that investors have a lot of confidence in the local market,” he said.

European stocks fell 1 percent and US stock futures pointed to a weak open in New York after a slew of poor jobs and sentiment numbers drove Wall Street to its lowest close in almost a month on Thursday.

The weakness in Europe and the US carries on from Asia where Japan’s Nikkei average fell 2 percent, hit by US economic worries, but also by jitters over what steps Japanese authorities might take to stem the recent yen rise.

Overseas investors bought US$230 million more Indonesian equities than they sold this week, the most in two months, exchange data showed.

Funds based abroad held Rp 177.2 trillion ($19.8 billion) of local currency government bonds as of
Aug. 16, a 3 percent increase from Rp 172.2 trillion at the end of July, the Finance Ministry said on its website.

Bakrie shares were among the top gainers and most actively traded on Friday. Bumi Resources (BUMI) climbed 16.27 percent to close at Rp 1,500, Bakrie Sumatra Plantations (UNSP) jumped 12.76 percent to Rp 265, Energi Mega Persada (ENRG) was up 8.53 percent to Rp 89, Bakrieland Development (ELTY) gained 7.29 percent to Rp 103 and Darma Henwa (DEWA) increased 1.96 percent to Rp 52. (est)