Indonesian stocks pushed higher on Wednesday, reversing early losses after Moody's upgraded the credit status of Southeast Asia's biggest economy to investment grade, with banks rallying following deposit ratings upgrades by the ratings agency.
Jakarta's Composite Index edged up 0.6 percent. Among nine Indonesian banks in the Moody's list, PT Bank Mandiri Tbk climbed 2.2 percent and PT Bank Rakyat Indonesia Tbk gained 1.4 percent.
Most other Southeast Asian stock markets were lower as market players took quick profits after Tuesday's rally following above-forecast GDP growth in China. Singapore fell 0.7 percent, Malaysia eased 0.13 percent and Thai stocks was down 0.5 percent. Indonesia's debt rating from Moody's rival agency, Fitch, was raised to investment grade on December 15. Markets have expected similar moves by other ratings agencies.
"It's not surprising. I don't think this particular piece is going to sort of move the market. It's just a positive trend that was part of it and within expectations," said CIMB regional strategist Chang Chiou Yi. "When you are in an investment grade, more investors could actually look at it. More and more people over the last few years have already gone into Indonesia. The pile can get bigger," she said.
Other analysts said Moody's upgrade was in line with expectations and some said it could boost Jakarta's stock market index to 4,000 by the end of January from 3,978 now. Investors in the region awaited Portugal debt sales and Greek talks on debt restructuring for further signs on Europe's debt problems. Demand for cash ahead of the Chinese New Year holidays was also a factor. In Manila, a rally in property shares sent the Philippines main stock index up 0.8 percent to an all-time high.
Expectations of lower interest rates boosted the outlook of property sector. Ayala Land Inc jumped 3.3 percent to two month highs and Robinsons Land Corp gained 0.9 percent, surging 15 percent this year, the best performer. The country's central bank will hold its first rate-setting meeting for the year on January 19, and analysts widely expect it to cut its key policy rate for the first time in 2 1/2 years in the face of on growing global risks. Among bright spots, Singapore's commodity firms Olam International Ltd 2.1 percent. Investors raised positions in cyclical stocks in anticipation of a rally before the Chinese New Year holidays.
Comments
Comments are closed for this article.