Low Inflation Expectations Push Up Indonesian Stocks
Anticipation of better-than-expected news on February inflation saw the Jakarta Composite Index rise on Monday.
“Markets are expecting lower inflation this month compared to January, which led the markets to believe the interest rate will be kept at the current level,” said Frederik Daniel Tanggela, a market analyst with Sucorinvest Central Gani.
Bank Indonesia will announce February inflation figures today. It will also hold a policy meeting on Friday, in which it is expected to keep its benchmark interest rate steady. The central bank raised its benchmark rate by 25 basis points to 6.75 percent last month.
The JCI climbed 26.82 points, or 0.78 percent, to Rp 3,470.35 on Monday. About 2.85 billion shares worth Rp 3.78 trillion ($429 million) exchanged hands. Gainers edged decliners 111 to 92.
Indosat, Indonesia’s second largest cellular provider, gained 1 percent to close at Rp 5,050 after Telekomunikasi Indonesia, the market leader, expressed its interest in buying Indosat’s fixed-line wireless service StarOne.
Astra Agro Lestari, the nation’s largest listed planation firm, rose 1.9 percent to close at Rp 21,850. September delivery palm oil rose as high as 3,452 ringgit ($1,132) in Kuala Lumpur on Monday.
Medco Energi Internasional, the country’s largest listed oil company, lost 1.7 percent to close at Rp 2,925. It announced late last week it would halt all exploration and remove its staff in Libya.
Coal miners stood to gain from the conflict’s impact on the global oil supply shortage, Frederik said. “Analysts will advise [investors] to buy coal shares.”
Berau Coal Energy, Indonesia’s fifth-largest coal miner, gained 1.9 percent to Rp 530, while Bumi Resources, the nation’s top producer of the fuel, rose 2.6 percent to close at Rp 3,000.
The rupiah strengthened 0.3 percent to 8,811 against dollar as of the market’s close on Monday, up from 8,838 at Friday’s close. It reached 8,805 at one point, the strongest level since June 2007.
“The rupiah will be steady before the inflation data,” said Lindawati Susanto, head of foreign-exchange trading at Bank Resona Perdania.
“The central bank may be tolerating gains as they want to control inflation.”