Stock Market Hits Record High

JAKARTA

The country’s stock market broke struck a record high on Thursday as it reached 2,831.24 points in mid-afternoon trade on the back of strong company earnings, dealers said.

The Jakarta Composite Index’s previous all-time high was 2,830.26 posted on January 9, 2008.

“This has happened because many listed companies showed solid financial reports in 2009. Investors feel very optimistic,” Bhakti Securities analyst Reza Nugraha said.

“The country is also economically and politically stable,” he added.

The index fell back slightly to close at 2,829.99, up 52.69 points or 1.90 percent.

Nugraha projected the index would reach 3,000-3,150 this year if there were no major upsets.

“The government’s plan to raise electricity rates in mid-2010, however, could curb the index movement for a while,” he said.

Sucorinvest Central Gani analyst Gifar Indra Sakti said the index had almost doubled in the past 12 months.

“The increase is pretty significant,” Sakti said, adding that mining, finance and banking sectors were the main drivers for the index growth.

Ciptadana Securities analyst Syaiful Adrian said inflation data also helped the gains.

The government said Thursday that the Consumer Price Index eased to 3.43 percent in March from 3.81 percent in February, due to lower basic food prices, the statistics agency said.

“Thanks to benign inflation data, there were 7.4 billion shares traded with a robust volume of Rp14 trillion (US$1.54 billion),” Adrian said.

Indonesia, Southeast Asia’s largest economy, posted 4.5 percent growth last year, third only after China and India in the Group of 20 industrialised and developing countries.

Robust domestic demand and sound economic policy has helped the country steer itself away from the global economic crisis.

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